Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 04, 2015 | Jun. 30, 2014 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | SOUTHWEST AIRLINES CO | ||
Entity Central Index Key | 92380 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | FALSE | ||
Entity Common Stock, Shares Outstanding | 675,993,892 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $18,358,439,198 |
Consolidated_Balance_Sheet
Consolidated Balance Sheet (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $1,282 | $1,355 |
Short-term investments | 1,706 | 1,797 |
Accounts and other receivables | 365 | 419 |
Inventories of parts and supplies, at cost | 342 | 467 |
Deferred income taxes | 477 | 168 |
Prepaid expenses and other current assets | 232 | 250 |
Total current assets | 4,404 | 4,456 |
Property and equipment, at cost: | ||
Flight equipment | 18,473 | 16,937 |
Ground property and equipment | 2,853 | 2,666 |
Deposits on flight equipment purchase contracts | 566 | 764 |
Assets constructed for others | 621 | 453 |
Property and equipment, at cost | 22,513 | 20,820 |
Less allowance for depreciation and amortization | 8,221 | 7,431 |
Property and equipment, net | 14,292 | 13,389 |
Goodwill | 970 | 970 |
Other assets | 534 | 530 |
Total assets | 20,200 | 19,345 |
Current liabilities: | ||
Accounts payable | 1,203 | 1,247 |
Accrued liabilities | 1,565 | 1,229 |
Air traffic liability | 2,897 | 2,571 |
Current maturities of long-term debt | 258 | 629 |
Total current liabilities | 5,923 | 5,676 |
Long-term debt less current maturities | 2,434 | 2,191 |
Deferred income taxes | 3,259 | 2,934 |
Construction obligation | 554 | 437 |
Other noncurrent liabilities | 1,255 | 771 |
Stockholders' equity: | ||
Common stock, $1.00 par value: 2,000,000,000 shares authorized; 807,611,634 shares issued in 2014 and 2013 | 808 | 808 |
Capital in excess of par value | 1,315 | 1,231 |
Retained earnings | 7,416 | 6,431 |
Accumulated other comprehensive loss | -738 | -3 |
Treasury stock, at cost: 132,017,550 and 107,136,946 shares in 2014 and 2013 respectively | -2,026 | -1,131 |
Total stockholders' equity | 6,775 | 7,336 |
Total liabilities and stockholders' equity | $20,200 | $19,345 |
Consolidated_Balance_Sheet_Par
Consolidated Balance Sheet (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $1 | $1 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (in shares) | 807,611,634 | 807,611,634 |
Treasury stock, at cost: shares (in shares) | 132,017,550 | 107,136,946 |
Consolidated_Statement_of_Inco
Consolidated Statement of Income (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
OPERATING REVENUES: | |||
Passenger | $17,658 | $16,721 | $16,093 |
Freight | 175 | 164 | 160 |
Other | 772 | 814 | 835 |
Total operating revenues | 18,605 | 17,699 | 17,088 |
OPERATING EXPENSES: | |||
Salaries, wages, and benefits | 5,434 | 5,035 | 4,749 |
Fuel and oil | 5,293 | 5,763 | 6,120 |
Maintenance materials and repairs | 978 | 1,080 | 1,132 |
Aircraft rentals | 295 | 361 | 355 |
Landing fees and other rentals | 1,111 | 1,103 | 1,043 |
Depreciation and amortization | 938 | 867 | 844 |
Acquisition and integration | 126 | 86 | 183 |
Other operating expenses | 2,205 | 2,126 | 2,039 |
Total operating expenses | 16,380 | 16,421 | 16,465 |
OPERATING INCOME | 2,225 | 1,278 | 623 |
OTHER EXPENSES (INCOME): | |||
Interest expense | 130 | 131 | 147 |
Interest Costs Capitalized Adjustment | -23 | -24 | -21 |
Interest income | -7 | -6 | -7 |
Other (gains) losses, net | 309 | -32 | -181 |
Total other expenses (income) | 409 | 69 | -62 |
INCOME BEFORE INCOME TAXES | 1,816 | 1,209 | 685 |
PROVISION FOR INCOME TAXES | 680 | 455 | 264 |
NET INCOME | $1,136 | $754 | $421 |
NET INCOME PER SHARE, BASIC (in dollars per share) | $1.65 | $1.06 | $0.56 |
NET INCOME PER SHARE, DILUTED (in dollars per share) | $1.64 | $1.05 | $0.56 |
Cash dividends declared per common share (in dollars per share) | $0.22 | $0.13 | $0.03 |
Consolidated_Statement_of_Comp
Consolidated Statement of Comprehensive Income (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net income | $1,136 | $754 | $421 |
Unrealized gain (loss) on defined benefit plan items, net of deferred taxes of ($8), $15, and ($11) | -16 | 24 | -17 |
Other, net of deferred taxes of $0, $7, and $3 | 0 | 9 | 3 |
OTHER COMPREHENSIVE INCOME (LOSS) | -735 | 116 | 105 |
COMPREHENSIVE INCOME | 401 | 870 | 526 |
Fuel derivatives | |||
Unrealized gain (loss) on derivatives, net of tax | -727 | 52 | 120 |
Interest rate derivatives | |||
Unrealized gain (loss) on derivatives, net of tax | $8 | $31 | ($1) |
Consolidated_Statement_of_Comp1
Consolidated Statement of Comprehensive Income (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred taxes on unrealized gain (loss), other, tax effect | $0 | $7 | $3 |
Deferred taxes on postretirement | 8 | 15 | -11 |
Fuel derivatives | |||
Deferred taxes on unrealized gain (loss) on derivatives, tax effect | -430 | 31 | 74 |
Interest rate derivatives | |||
Deferred taxes on unrealized gain (loss) on derivatives, tax effect | $5 | $19 | $0 |
Consolidated_Statement_of_Stoc
Consolidated Statement of Stockholder's Equity (USD $) | Total | Common Stock | Capital in excess of par value | Retained earnings | Accumulated other comprehensive income (loss) | Treasury stock |
In Millions, unless otherwise specified | ||||||
Balance at beginning of period at Dec. 31, 2011 | $6,877 | $808 | $1,222 | $5,395 | ($224) | ($324) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Repurchase of common stock | -400 | 0 | 0 | 0 | 0 | -400 |
Issuance of common and treasury stock pursuant to Employee stock plans | 23 | 0 | -4 | -22 | 0 | 49 |
Net tax benefit (expense) of options exercised | -24 | 0 | -24 | 0 | 0 | 0 |
Share-based compensation | 16 | 0 | 16 | 0 | 0 | 0 |
Cash dividends | -26 | 0 | 0 | -26 | 0 | 0 |
Comprehensive income | 526 | 0 | 0 | 421 | 105 | 0 |
Balance at end of period at Dec. 31, 2012 | 6,992 | 808 | 1,210 | 5,768 | -119 | -675 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Repurchase of common stock | -540 | 0 | 0 | 0 | 0 | -540 |
Issuance of common and treasury stock pursuant to Employee stock plans | 96 | 0 | 12 | 0 | 0 | 84 |
Net tax benefit (expense) of options exercised | -9 | 0 | -9 | 0 | 0 | 0 |
Share-based compensation | 18 | 0 | 18 | 0 | 0 | 0 |
Cash dividends | -91 | 0 | 0 | -91 | 0 | 0 |
Comprehensive income | 870 | 0 | 0 | 754 | 116 | 0 |
Balance at end of period at Dec. 31, 2013 | 7,336 | 808 | 1,231 | 6,431 | -3 | -1,131 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Repurchase of common stock | -955 | 0 | 0 | 0 | 0 | -955 |
Issuance of common and treasury stock pursuant to Employee stock plans | 100 | 0 | 40 | 0 | 0 | 60 |
Net tax benefit (expense) of options exercised | 23 | 0 | 23 | 0 | 0 | 0 |
Share-based compensation | 21 | 0 | 21 | 0 | 0 | 0 |
Cash dividends | -151 | 0 | 0 | -151 | 0 | 0 |
Comprehensive income | 401 | 0 | 0 | 1,136 | -735 | 0 |
Balance at end of period at Dec. 31, 2014 | $6,775 | $808 | $1,315 | $7,416 | ($738) | ($2,026) |
Consolidated_Statement_of_Stoc1
Consolidated Statement of Stockholder's Equity (Parenthetical) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends, per share (in dollars per share) | $0.22 | $0.13 | $0.03 |
Consolidated_Statement_of_Cash
Consolidated Statement of Cash Flows (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $1,136 | $754 | $421 |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Depreciation and amortization | 938 | 867 | 844 |
Unrealized (gain) loss on fuel derivative instruments | 279 | -5 | -189 |
Deferred income taxes | 501 | 50 | 251 |
Changes in certain assets and liabilities: | |||
Accounts and other receivables | 54 | -17 | -33 |
Other assets | 142 | -46 | -104 |
Accounts payable and accrued liabilities | 36 | 343 | 186 |
Air traffic liability | 326 | 400 | 334 |
Cash collateral received from (provided to) derivative counterparties | -233 | 57 | 233 |
Other, net | -277 | 74 | 121 |
Net cash provided by operating activities | 2,902 | 2,477 | 2,064 |
Net cash used in investing activities | |||
Capital expenditures | -1,748 | -1,433 | -1,348 |
Assets constructed for others | -80 | 0 | |
Prior Period Reclassification Adjustment | 14 | ||
Purchases of short-term investments | -3,080 | -3,135 | -2,481 |
Proceeds from sales of short-term and other investments | 3,185 | 3,198 | 2,996 |
Other, net | -4 | 0 | 0 |
Net cash used in investing activities | -1,727 | -1,384 | -833 |
Net cash used in financing activities | |||
Proceeds from issuance of long-term debt | 300 | 0 | 0 |
Proceeds from Employee stock plans | 110 | 96 | 27 |
Reimbursement for assets constructed for others | 27 | 0 | 0 |
Proceeds from termination of interest rate derivative instrument | 0 | 0 | 38 |
Payments of long-term debt and capital lease obligations | -561 | -313 | -578 |
Payments of cash dividends | -139 | -71 | -22 |
Repayment of construction obligation | -11 | -5 | 0 |
Repurchase of common stock | -955 | -540 | -400 |
Other, net | -19 | -18 | -12 |
Net cash used in financing activities | -1,248 | -851 | -947 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | -73 | 242 | 284 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 1,355 | 1,113 | 829 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 1,282 | 1,355 | 1,113 |
CASH PAYMENTS FOR: | |||
Interest | 128 | 133 | 153 |
Income taxes | 155 | 346 | 100 |
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS: | |||
Assets constructed for others | $88 | $105 | $129 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||
Basis of Presentation | ||||||||||||||||||
Southwest Airlines Co. (the “Company”) operates Southwest Airlines, a major domestic airline. The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, which include AirTran Holdings, LLC. On May 2, 2011 (the “acquisition date”), the Company acquired all of the outstanding equity of AirTran Holdings, Inc. (“AirTran Holdings”), the former parent company of AirTran Airways, Inc. (“AirTran Airways”). Throughout these Notes, the Company makes reference to AirTran, which is meant to be inclusive of the following: (i) for periods prior to the acquisition date, AirTran Holdings and its subsidiaries, including, among others, AirTran Airways; and (ii) for periods on and after the acquisition date, AirTran Holdings, LLC, the successor to AirTran Holdings, and its subsidiaries, including among others, AirTran Airways. The accompanying Consolidated Financial Statements include the results of operations and cash flows for all periods presented and all significant inter-entity balances and transactions have been eliminated. The preparation of financial statements in conformity with generally accepted accounting principles in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. | ||||||||||||||||||
Certain prior period amounts have been reclassified to conform to the current presentation. In the Consolidated Statement of Cash Flows for the year ended December 31, 2013, the Company has reclassified $14 million from Capital expenditures to Assets constructed for others. See Note 4 for further information. | ||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||
Cash in excess of that necessary for operating requirements is invested in short-term, highly liquid, income-producing investments. Investments with original maturities of three months or less when purchased are classified as cash and cash equivalents, which primarily consist of certificates of deposit, money market funds, and investment grade commercial paper issued by major corporations and financial institutions. Cash and cash equivalents are stated at cost, which approximates fair value. | ||||||||||||||||||
As of December 31, 2014, $266 million in cash collateral deposits were provided by the Company to its fuel hedge counterparties and no cash collateral deposits were held by or provided by the Company to its interest rate hedge counterparties. As of December 31, 2013, the Company had no cash collateral deposits held by or provided by the Company to its fuel hedge counterparties and the Company had provided cash collateral deposits totaling $32 million to its interest rate hedge counterparties. Cash collateral amounts provided or held associated with fuel and interest rate derivative instruments are not restricted in any way and earn interest income at an agreed upon rate that approximates the rates earned on short-term securities issued by the U.S. Government. Depending on the fair value of the Company’s fuel and interest rate derivative instruments, the amounts of collateral deposits held or provided at any point in time can fluctuate significantly. See Note 10 for further information on these collateral deposits and fuel derivative instruments. | ||||||||||||||||||
Short-term and noncurrent investments | ||||||||||||||||||
Short-term investments consist of investments with original maturities of greater than three months but less than twelve months when purchased. These are primarily short-term securities issued by the U.S. Government and certificates of deposit issued by domestic banks. All of these investments are classified as available-for-sale securities and are stated at fair value, which approximates cost. For all short-term investments, at each reset period or upon reinvestment, the Company accounts for the transaction as Proceeds from sales of short-term investments for the security relinquished, and Purchases of short-investments for the security purchased, in the accompanying Consolidated Statement of Cash Flows. Unrealized gains and losses, net of tax, if any, are recognized in Accumulated other comprehensive income (loss) (“AOCI”) in the accompanying Consolidated Balance Sheet. Realized net gains and losses on specific investments, if any, are reflected in Interest income in the accompanying Consolidated Statement of Income. Both unrealized and realized gains and/or losses associated with investments were immaterial for all years presented. | ||||||||||||||||||
Noncurrent investments consist of investments with maturities of greater than twelve months. At December 31, 2014, these primarily consisted of the Company’s auction rate security instruments that it expects will not be redeemed during 2015. See Note 11 for further information. Noncurrent investments are included as a component of Other assets in the Consolidated Balance Sheet. | ||||||||||||||||||
Accounts and other receivables | ||||||||||||||||||
Accounts and other receivables are carried at cost. They primarily consist of amounts due from credit card companies associated with sales of tickets for future travel, amounts due from business partners in the Company’s frequent flyer program, and amounts due from counterparties associated with fuel derivative instruments that have settled. The allowance for doubtful accounts was immaterial at December 31, 2014 and 2013. In addition, the provision for doubtful accounts and write-offs for 2014 and 2013 were each immaterial. | ||||||||||||||||||
Inventories | ||||||||||||||||||
Inventories consist primarily of aircraft fuel, flight equipment expendable parts, materials, and supplies. All of these items are carried at average cost, less an allowance for obsolescence. These items are generally charged to expense when issued for use. The reserve for obsolescence was $46 million and $36 million at December 31, 2014, and 2013, respectively. In addition, the Company’s provision for obsolescence and write-offs for 2014, 2013, and 2012 were each immaterial. | ||||||||||||||||||
Property and equipment | ||||||||||||||||||
Property and equipment is stated at cost. Capital expenditures includes payments made for aircraft, other flight equipment, purchase deposits related to future aircraft deliveries, and ground and other property and equipment. Depreciation is provided by the straight-line method to estimated residual values over periods generally ranging from 23 to 25 years for flight equipment and 5 to 30 years for ground property and equipment once the asset is placed in service. Residual values estimated for aircraft generally range from 2 to 20 percent and for ground property and equipment generally range from 0 to 10 percent. Property under capital leases and related obligations are initially recorded at an amount equal to the present value of future minimum lease payments computed on the basis of the Company’s incremental borrowing rate or, when known, the interest rate implicit in the lease. Amortization of property under capital leases is on a straight-line basis over the lease term and is included in Depreciation and amortization expense. Leasehold improvements generally are amortized on a straight-line basis over the shorter of the estimated useful life of the improvement or the remaining term of the lease. Assets constructed for others primarily consists of airport improvement projects, once placed into service, in which the Company is considered the accounting owner of the facilities, and such assets are amortized to estimated residual value over the term of the Company's lease or the expected life of the asset. See Note 4 for further information. | ||||||||||||||||||
The Company evaluates its long-lived assets used in operations for impairment when events and circumstances indicate that the undiscounted cash flows to be generated by that asset are less than the carrying amounts of the asset and may not be recoverable. Factors that would indicate potential impairment include, but are not limited to, significant decreases in the market value of the long-lived asset(s), a significant change in the long-lived asset’s physical condition, and operating or cash flow losses associated with the use of the long-lived asset. If an asset is deemed to be impaired, an impairment loss is recorded for the excess of the asset book value in relation to its estimated fair value. | ||||||||||||||||||
During first quarter 2012 the Company changed the estimated retirement dates of several 737-300 and 737-500 aircraft based on revisions in the Company’s fleet plan. This change, which was accounted for on a prospective basis, resulted in an acceleration of depreciation expense, since the majority of these aircraft had previously been expected to retire in periods beyond 2012, but were subsequently expected to be retired during 2012. The impact of this change on the year ended December 31, 2012 was an increase to Depreciation expense of $12 million. Excluding the impact of Profitsharing and income taxes, the change resulted a $6 million decrease to Net income and a $0.01 decrease to Basic and Diluted Net income per share for the year ended December 31, 2012. | ||||||||||||||||||
During third quarter 2012 the Company changed the estimated residual values of its entire fleet of owned 737-300 and 737-500 aircraft. This change was based on an agreement entered into during July 2012, pursuant to which the Company will lease or sublease certain aircraft to Delta Air Lines, Inc., and the resulting impact this transaction will have on how the Company manages the ultimate retirement of its owned 737-300 and 737-500 aircraft. See Note 7 for further information on the lease/sublease transaction. Based on the expected retirement dates and then current and expected future market conditions related to its owned 737-300 and 737-500 aircraft, the Company reduced the residual values of these aircraft from approximately ten percent of original cost to approximately two percent of original cost. As this reduction in residual value was considered a change in estimate, it was accounted for on a prospective basis, and thus the Company will record additional depreciation expense over the remainder of the useful lives for each aircraft. The impact of this change on the year ended December 31, 2012 was an increase to Depreciation expense of $34 million. Excluding the impact of Profitsharing and income taxes, the change resulted an $18 million decrease to Net income and a $0.02 decrease to Basic and Diluted Net income per share for the year ended December 31, 2012. | ||||||||||||||||||
Aircraft and engine maintenance | ||||||||||||||||||
The cost of scheduled inspections and repairs and routine maintenance costs for all aircraft and engines are charged to Maintenance materials and repairs expense as incurred. The Company also has “power-by-the-hour” agreements related to certain of its aircraft engines with external service providers. Under these agreements, which the Company has determined effectively transfers the risk and creates an obligation associated with the maintenance on such engines to the counterparty, expense is recorded commensurate with each hour flown on an engine. In situations where the payments to the counterparty do not sufficiently match the level of services received during the period, expense is recorded on a straight-line basis over the term of the agreement based on our best estimate of expected future aircraft utilization. For its engine maintenance contracts that do not transfer risk to the service provider, the Company records expense on a time and materials basis when an engine repair event takes place. Modifications that significantly enhance the operating performance or extend the useful lives of aircraft or engines are capitalized and amortized over the remaining life of the asset. | ||||||||||||||||||
Goodwill and intangible assets | ||||||||||||||||||
The Company applies a fair value based impairment test to the carrying value of goodwill and indefinite-lived intangible assets on an annual basis (as of October 1), or more frequently if certain events or circumstances indicate that an impairment loss may have been incurred. The FASB standard “Testing Indefinite-Lived Intangible Assets for Impairment” gives companies the option to perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired rather than calculating the fair value of the indefinite-lived intangible asset. The Company adopted this standard and has applied the provisions to its annual indefinite-lived intangible asset impairment test for 2014. | ||||||||||||||||||
The Company first utilizes a qualitative approach and analyzes various factors to determine if events and circumstances have affected the fair value of the goodwill and indefinite-lived intangible assets. If the Company determines it is more likely than not that the asset value may be impaired, the Company then uses the quantitative approach to assess the asset’s fair value and amount of impairment. As a result of the Company’s qualitative analyses performed during 2014 the Company concluded it was more likely than not that the fair values of its Goodwill and Indefinite-lived intangible assets was greater than the carrying value and; therefore, a quantitative assessment was not necessary. | ||||||||||||||||||
Intangible assets primarily consist of acquired leasehold rights to certain airport owned gates at Chicago’s Midway International Airport, take-off and landing slots at certain domestic slot-controlled airports, and certain intangible assets recognized from the AirTran acquisition. The following table is a summary of the Company’s intangible assets, which are included as a component of Other assets in the Company's Consolidated Balance Sheet, as of December 31, 2014 and 2013: | ||||||||||||||||||
Year ended December 31, 2014 | Year ended December 31, 2013 | |||||||||||||||||
(in millions) | Weighted-average useful life (in years) | Gross carrying | Accumulated | Gross carrying amount | Accumulated Amortization | |||||||||||||
amount | amortization | |||||||||||||||||
Customer relationships/marketing agreements | 9 | $ | 38 | $ | 26 | $ | 39 | $ | 23 | |||||||||
Trademarks/trade names | 6 | 36 | 30 | 36 | 25 | |||||||||||||
Owned domestic slots | Indefinite | 303 | n/a | 93 | n/a | |||||||||||||
Leased domestic slots (a) | 39 | 19 | 5 | 19 | 4 | |||||||||||||
Non-compete agreements | 2 | 5 | 5 | 5 | 5 | |||||||||||||
Gate leasehold rights | 19 | 60 | 32 | 60 | 29 | |||||||||||||
Total | 15 | $ | 461 | $ | 98 | $ | 252 | $ | 86 | |||||||||
(a) Useful life of leased slots is based on the stated lease term. | ||||||||||||||||||
During fourth quarter 2013, following the Company’s acquisition of additional slots at New York’s LaGuardia Airport, the Company made the determination that all of its owned domestic slots should be assigned an indefinite life and would thus not be subject to further amortization, including those that are owned but leased to other carriers. In addition, during first quarter 2014, the Company acquired additional slots at Washington’s Ronald Reagan National Airport which were also assigned an indefinite life. Among other factors, the determination that all of the Company's owned domestic slots should be assigned an indefinite life was due to the Company’s reassessment of the current size and importance of its operations at New York’s LaGuardia Airport and Washington’s Ronald Reagan National Airport versus when the Company first began service to these airports in recent years. The impact of this prospective change in accounting estimate is immaterial. | ||||||||||||||||||
The aggregate amortization expense for 2014, 2013, and 2012 was $13 million, $19 million, and $25 million, respectively. Estimated aggregate amortization expense for the five succeeding years and thereafter is as follows: 2015 – $11 million, 2016 – $8 million, 2017 – $5 million, 2018 – $5 million, 2019 – $4 million, and thereafter – $27 million. | ||||||||||||||||||
Revenue recognition | ||||||||||||||||||
Tickets sold are initially deferred as Air traffic liability. Passenger revenue is recognized when transportation is provided. Air traffic liability primarily represents tickets sold for future travel dates and estimated refunds and exchanges of tickets sold for past travel dates. The majority of the Company’s tickets sold are nonrefundable. Refundable tickets that are sold but not flown on the travel date can be reused for another flight, up to a year from the date of sale, or refunded. A small percentage of tickets (or partial tickets) expire unused. The Company estimates the amount of tickets that expire unused and recognizes such amounts in Passenger revenue using the redemption method based on scheduled flight date. Prior to September 13, 2013, funds associated with tickets in which a passenger did not show up for a flight without canceling were able to be reused on another flight for up to twelve months. On September 13, 2013, Southwest implemented a No Show policy that applies to nonrefundable fares that are not canceled or changed by a Customer at least ten minutes prior to a flight's scheduled departure. Based on the Company's revenue recognition policy, revenue is now recorded at the flight date for a Customer who does not change his/her itinerary and loses his/her funds. Amounts collected from passengers for ancillary services such as baggage and other fees are generally recognized as Other revenue when the service is provided, which is typically the flight date. | ||||||||||||||||||
The Company's policy is to record revenue for the estimated spoilage of tickets (including partial tickets) once the flight date has passed, under the redemption method. Initial spoilage estimates are routinely adjusted and ultimately finalized once the tickets expire, which is typically twelve months after the original purchase date. Spoilage estimates are based on the Customers' historical travel behavior as well as assumptions about the Customers' future travel behavior. Assumptions used to generate spoilage estimates can be impacted by several factors including, but not limited to: fare increases, fare sales, changes to the Company's ticketing policies, changes to the Company’s refund, exchange and unused funds policies, or economic factors. | ||||||||||||||||||
The Company is also required to collect certain taxes and fees from Customers on behalf of government agencies and remit these back to the applicable governmental entity on a periodic basis. These taxes and fees include U.S. federal transportation taxes, federal security charges, and airport passenger facility charges. These items are collected from Customers at the time they purchase their tickets, but are not included in Passenger revenue. The Company records a liability upon collection from the Customer and relieves the liability when payments are remitted to the applicable governmental agency. | ||||||||||||||||||
Frequent flyer program | ||||||||||||||||||
The Company records a liability for the estimated incremental cost of providing free travel under its frequent flyer program for all amounts earned from flight activity that are expected to be redeemed for future travel. The estimated incremental cost includes direct passenger costs such as fuel, food, and other operational costs, but does not include any contribution to fixed overhead costs or profit. | ||||||||||||||||||
Southwest also sells frequent flyer points and related services to companies participating in its frequent flyer program. Funds received from the sale of these points are accounted for using the residual method. Under this method, the Company determined the portion of funds received that relate to free travel were currently estimated to be 100 percent of the amount received under the Company's Rapid Reward program as of December 31, 2014. These amounts are deferred and recognized as Passenger revenue when the ultimate free travel awards are flown. For all points sold to business partners that are expected to expire unused, the Company recognizes spoilage in accordance with the redemption method. The Company's consolidated liability associated with the sale of frequent flyer points and/or flight credits, was approximately $1.3 billion and $1.1 billion as of December 31, 2014, and 2013, respectively. This liability is included as part of Air Traffic liability in the Company’s Consolidated Balance Sheet. | ||||||||||||||||||
During fourth quarter 2014, the Company increased the amount of spoilage recorded associated with frequent flyer points sold to business partners as a result of continued monitoring of Member redemption activity and behavior under its Rapid Rewards program. Based on a sufficient amount of historical data and Member attributes observed since the new program was launched in 2011, the Company developed a predictive statistical model to analyze the amount of spoilage expected. In estimating spoilage, the Company takes into account the Member’s past behavior, as well as several factors that are expected to be indicative of the likelihood of future point redemption. These factors include, but are not limited to, tenure with program, points accrued in the program, and whether or not the customer has a co-branded credit card. This change in estimate, which was recorded on a prospective basis, effective October 1, 2014, increased Passenger revenues by approximately $55 million for the quarter and the year ended December 31, 2014. After consideration of profitsharing and taxes, the impact of this change to net income was an increase of $29 million, or $.04 per Basic and Diluted share, for the year ended December 31, 2014. The higher spoilage rate is expected to continue in 2015; however, the precise revenue impact will not be determinable until the actual number of point redemptions for the period is known. | ||||||||||||||||||
Advertising | ||||||||||||||||||
Advertising costs are charged to expense as incurred. Advertising and promotions expense for the years ended December 31, 2014, 2013, and 2012 was $207 million, $208 million, and $223 million, respectively, and is included as a component of Other operating expense in the accompanying Consolidated Statement of Income. | ||||||||||||||||||
Share-based Employee compensation | ||||||||||||||||||
The Company has share-based compensation plans covering certain Employees, including plans covering the Company’s Board of Directors. The Company accounts for share-based compensation based on its grant date fair value. See Note 9 for further information. | ||||||||||||||||||
Financial derivative instruments | ||||||||||||||||||
The Company accounts for financial derivative instruments at fair value and applies hedge accounting rules where appropriate. The Company utilizes various derivative instruments, including jet fuel, crude oil, unleaded gasoline, and heating oil-based derivatives, to attempt to reduce the risk of its exposure to jet fuel price increases. These instruments consist primarily of purchased call options, collar structures, call spreads, put spreads, and fixed price swap agreements, and upon proper qualification are accounted for as cash-flow hedges. The Company also has interest rate swap agreements to convert a portion of its fixed-rate debt to floating rates and has swap agreements that convert certain floating-rate debt to a fixed-rate. These interest rate hedges are appropriately designated as either fair value hedges or as cash flow hedges. | ||||||||||||||||||
Since the majority of the Company’s financial derivative instruments are not traded on a market exchange, the Company estimates their fair values. Depending on the type of instrument, the values are determined by the use of present value methods or option value models with assumptions about commodity prices based on those observed in underlying markets. Also, since there is not a reliable forward market for jet fuel, the Company must estimate the future prices of jet fuel in order to measure the effectiveness of the hedging instruments in offsetting changes to those prices. Forward jet fuel prices are estimated through utilization of a statistical-based regression equation with data from market forward prices of like commodities. This equation is then adjusted for certain items, such as transportation costs, that are stated in the Company’s fuel purchasing contracts with its vendors. | ||||||||||||||||||
For the effective portion of settled fuel hedges, the Company records the associated gains or losses as a component of Fuel and oil expense in the Consolidated Statement of Income. For amounts representing ineffectiveness, as defined, or changes in fair value of derivative instruments for which hedge accounting is not applied, the Company records any gains or losses as a component of Other (gains) losses, net, in the Consolidated Statement of Income. Amounts that are paid or received in connection with the purchase or sale of financial derivative instruments (i.e., premium costs of option contracts) are classified as a component of Other (gains) losses, net, in the Consolidated Statement of Income in the period in which the instrument settles or expires. All cash flows associated with purchasing and selling derivatives are classified as operating cash flows in the Consolidated Statement of Cash Flows, within Changes in certain assets and liabilities. See Note 10 for further information on hedge accounting and financial derivative instruments. | ||||||||||||||||||
The Company classifies its cash collateral provided to or held from counterparties in a “net” presentation on the Consolidated Balance Sheet against the fair value of the derivative positions with those counterparties. See Note 10 for further information. | ||||||||||||||||||
Software capitalization | ||||||||||||||||||
The Company capitalizes certain internal and external costs related to the acquisition and development of internal use software during the application development stages of projects. The Company amortizes these costs using the straight-line method over the estimated useful life of the software, which typically ranges from five to fifteen years. Costs incurred during the preliminary project or the post-implementation/operation stages of the project are expensed as incurred. Capitalized computer software, included as a component of Ground property and equipment in the accompanying Consolidated Balance Sheet, net of accumulated depreciation, was $403 million and $357 million at December 31, 2014, and 2013, respectively. Computer software depreciation expense was $122 million, $90 million, and $59 million for the years ended December 31, 2014, 2013, and 2012, respectively, and is included as a component of Depreciation and amortization expense in the accompanying Consolidated Statement of Income. | ||||||||||||||||||
Income taxes | ||||||||||||||||||
The Company accounts for deferred income taxes utilizing an asset and liability method, whereby deferred tax assets and liabilities are recognized based on the tax effect of temporary differences between the financial statements and the tax basis of assets and liabilities, as measured by current enacted tax rates. The Company also evaluates the need for a valuation allowance to reduce deferred tax assets to estimated recoverable amounts. | ||||||||||||||||||
The Company’s policy for recording interest and penalties associated with uncertain tax positions is to record such items as a component of income before income taxes. Penalties are recorded in Other (gains) losses, net, and interest paid or received is recorded in Interest expense or Interest income, respectively, in the Consolidated Statement of Income. Amounts recorded for penalties and interest related to uncertain tax positions were immaterial for all years presented. | ||||||||||||||||||
Concentration risk | ||||||||||||||||||
Approximately 83 percent of the Company’s full-time equivalent Employees are unionized and are covered by collective bargaining agreements. The Company manages this risk by maintaining positive relationships with its Employees and its Employees’ Representatives. The majority of the Company's unionized Employees, including its Pilots, Mechanics, Ramp, Operations, Provisioning and Freight Agents, Flight Attendants, Material Specialists, Dispatchers, Flight Crew Training Instructors, Flight Simulator Technicians, and Facilities Maintenance Technicians are in discussions on labor agreements or have labor agreements which will become amendable within one year. These Employee groups represent approximately 70 percent of the Company’s full-time equivalent Employees as of December 31, 2014. | ||||||||||||||||||
The Company attempts to minimize its concentration risk with regards to its cash, cash equivalents, and its investment portfolio. This is accomplished by diversifying and limiting amounts among different counterparties, the type of investment, and the amount invested in any individual security or money market fund. | ||||||||||||||||||
To manage risk associated with financial derivative instruments held, the Company selects and will periodically review counterparties based on credit ratings, limits its exposure to a single counterparty, and monitors the market position of the program and its relative market position with each counterparty. The Company also has agreements with counterparties containing early termination rights and/or bilateral collateral provisions whereby security is required if market risk exposure exceeds a specified threshold amount or credit ratings fall below certain levels. Collateral deposits provided to or held from counterparties serve to decrease, but not totally eliminate, the credit risk associated with the Company’s hedging program. See Note 10 for further information. | ||||||||||||||||||
As of December 31, 2014, the Company operates an all-Boeing fleet, all of which are variations of the Boeing 737. Following the 2011 acquisition of AirTran, the Company also operated a fleet of Boeing 717's, but these aircraft were removed from the Company's operations prior to the end of 2014. See Note 7 for further information. If the Company were unable to acquire additional aircraft or associated aircraft parts from Boeing, or Boeing were unable or unwilling to make timely deliveries of aircraft or to provide adequate support for its products, the Company’s operations would be materially adversely impacted. In addition, the Company would be materially adversely impacted in the event of a mechanical or regulatory issue associated with the Boeing 737 aircraft type, whether as a result of downtime for part or all of the Company’s fleet or because of a negative perception by the flying public. The Company is also dependent on sole suppliers for aircraft engines and certain other aircraft parts and would, therefore, also be materially adversely impacted in the event of the unavailability of, or a mechanical or regulatory issue associated with, engines and other parts. | ||||||||||||||||||
The Company has historically entered into agreements with some of its co-brand, payment, and loyalty partners that contain exclusivity aspects which place certain confidential restrictions on the Company from entering into certain arrangements with other payment and loyalty partners. These arrangements generally extend for the terms of the partnerships, none of which currently extend beyond May 2017. The Company believes the financial benefits generated by the exclusivity aspects of these arrangements outweigh the risks involved with such agreements. |
NEW_ACCOUNTING_PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Changes and Error Corrections [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | NEW ACCOUNTING PRONOUNCEMENTS |
On May 28, 2014, the Financial Accounting Standards Board and the International Accounting Standards Board issued converged guidance on recognizing revenue in contracts with customers. The new guidance establishes a single core principle in the Accounting Standards Update ("ASU") No. 2014-09, which is the recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance will affect any reporting organization that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. This ASU is effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2016, and early adoption is not permitted. The Company believes the most significant impacts of this ASU on its accounting will be (i) the elimination of the incremental cost method for frequent flyer accounting, which would require the Company to re-value its liability earned by Customers associated with flights points with a relative fair value approach, and (ii) the requirement that the Company discontinue use of the residual method in allocating funds from the sale of frequent flyer points to business partners in its frequent flyer program, which would also require the adoption of a relative fair value approach. The Company is continuing to evaluate the new guidance and plans to provide additional information about its expected financial impact at a future date. | |
On August 27, 2014, the Financial Accounting Standards Board issued ASU No. 2014-15. This standard provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. This ASU is effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2016, with early adoption permitted. The Company is evaluating the new guidance and plans to provide additional information about its expected impact at a future date. |
NET_INCOME_PER_SHARE
NET INCOME PER SHARE | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
NET INCOME PER SHARE | NET INCOME PER SHARE | |||||||||||
The following table sets forth the computation of basic and diluted net income per share (in millions except per share amounts): | ||||||||||||
Year ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
NUMERATOR: | ||||||||||||
Net income | $ | 1,136 | $ | 754 | $ | 421 | ||||||
Incremental income effect of | 4 | 3 | 3 | |||||||||
interest on 5.25% convertible notes | ||||||||||||
Net income after assumed conversion | $ | 1,140 | $ | 757 | $ | 424 | ||||||
DENOMINATOR: | ||||||||||||
Weighted-average shares outstanding, basic | 687 | 710 | 750 | |||||||||
Dilutive effect of Employee stock options and | 3 | 2 | 1 | |||||||||
restricted stock units | ||||||||||||
Dilutive effect of 5.25% convertible notes | 6 | 6 | 6 | |||||||||
Adjusted weighted-average shares outstanding, diluted | 696 | 718 | 757 | |||||||||
NET INCOME PER SHARE: | ||||||||||||
Basic | $ | 1.65 | $ | 1.06 | $ | 0.56 | ||||||
Diluted | $ | 1.64 | $ | 1.05 | $ | 0.56 | ||||||
Potentially dilutive amounts excluded from calculations: | ||||||||||||
Stock options and restricted stock units | — | 9 | 35 | |||||||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES | |||||||||||
Commitments | ||||||||||||
The Company has contractual obligations and commitments primarily with regard to future purchases of aircraft, repayment of debt, and lease arrangements. During the year ended December 31, 2014, the Company purchased 33 new 737-800 aircraft from Boeing and 11 used 737-700 aircraft from third parties. In addition, the Company also leased 11 737-700 aircraft from third parties, retired from service five of its older aircraft (three 737-300 and two 737-500), and removed 66 of its 717-200 aircraft from service during 2014. As of December 31, 2014, the Company had firm deliveries and options for Boeing 737-700, 737-800, 737 MAX 7, and 737 MAX 8 aircraft as follows: | ||||||||||||
The Boeing Company | The Boeing Company | |||||||||||
737 NG | 737 MAX | |||||||||||
-700 | -800 | Options | Additional -700 A/C | -7 | -8 | Options | Total | |||||
Firm | Firm | Firm | Firm | |||||||||
Orders | Orders | Orders | Orders | |||||||||
2015 | — | 19 | — | 16 | — | — | — | 35 | ||||
2016 | 31 | — | 11 | 4 | — | — | — | 46 | ||||
2017 | 15 | — | 12 | — | — | 14 | — | 41 | ||||
2018 | 10 | — | 12 | — | — | 13 | — | 35 | ||||
2019 | — | — | — | — | 15 | 10 | — | 25 | ||||
2020 | — | — | — | — | 14 | 22 | — | 36 | ||||
2021 | — | — | — | — | 1 | 33 | 18 | 52 | ||||
2022 | — | — | — | — | — | 30 | 19 | 49 | ||||
2023 | — | — | — | — | — | 24 | 23 | 47 | ||||
2024 | — | — | — | — | — | 24 | 23 | 47 | ||||
2025 | — | — | — | — | — | — | 36 | 36 | ||||
2026 | — | — | — | — | — | — | 36 | 36 | ||||
2027 | — | — | — | — | — | — | 36 | 36 | ||||
Total | 56 | -1 | 19 | 35 | 20 | 30 | 170 | -2 | 191 | 521 | ||
(1) The Company has flexibility to substitute 737-800s in lieu of 737-700 firm orders. | ||||||||||||
(2) The Company has flexibility to substitute MAX 7 in lieu of MAX 8 firm orders beginning in 2019. | ||||||||||||
The Company's financial commitments associated with the Boeing firm orders and additional scheduled deliveries in the above aircraft table are as follows: $836 million in 2015, $1.2 billion in 2016, $1.2 billion in 2017, $1.0 billion in 2018, $1.1 billion in 2019, and $5.7 billion thereafter. | ||||||||||||
Fort Lauderdale-Hollywood International Airport | ||||||||||||
In December 2013, the Company entered into an agreement with Broward County, Florida, which owns and operates Fort Lauderdale-Hollywood International Airport, to oversee and manage the design and construction of the airport's Terminal 1 Modernization Project at a cost not to exceed $295 million. In addition to significant improvements to the existing Terminal 1, the project includes the design and construction of a new five-gate Concourse A with an international processing facility. Funding for the project will come directly from Broward County sources, but will flow through the Company in its capacity as manager of the project. Construction on the project is not expected to begin until mid to late 2015. The Company believes that due to its agreed upon role in overseeing and managing the project, it will be considered the owner of the project for accounting purposes. As such, in the Consolidated Balance Sheet, the Company is expected to record an increase in Assets constructed for others as the project is built, along with a corresponding outflow within Capital expenditures, in the Consolidated Statement of Cash Flows, and an increase to Construction obligation (with a corresponding cash inflow from Financing activities in the Consolidated Statement of Cash Flows) as reimbursements are received from Broward County. | ||||||||||||
Houston William P. Hobby Airport | ||||||||||||
The Company entered into a Memorandum of Agreement (“MOA”) with the City of Houston (“City”), effective June 2012, to expand the existing Houston Hobby airport facility. As provided in the MOA, the Company and the City have entered into an Airport Use and Lease Agreement (“Lease”) to control the execution of this expansion and the financial terms thereof. Per the MOA and Lease, this project provides for a new five-gate international terminal with international passenger processing facilities, expansion of the existing security checkpoint, and upgrades to the Southwest ticket counter area. The project is estimated to cost $156 million, and the Company has agreed to provide the funding for, as well as management over, the project. In return, the capital cost portion of the rent the Company pays for the international facility will be waived from the initial occupancy until the expiration of the Lease. However, after completion of the project, the City has the option to buy-out Southwest's investment at the then-unamortized cost of the facility. This purchase would trigger payment of the previously waived capital cost component of rents owed the City. Additionally, some portion of the project is expected to qualify for rental credits that would be utilized upon completion of the facility against the Company’s lease payments at the airport. Construction began during third quarter 2013 and is estimated to be completed during the second half of 2015. | ||||||||||||
As a result of its significant involvement in the Houston Hobby project, the Company has evaluated its ongoing accounting requirements in consideration of accounting guidance provided for lessees involved in asset construction, and has determined that it qualifies as the accounting owner of the facility during the construction period. As such, during construction, the Company records expenditures as Assets constructed for others in the Consolidated Balance Sheet, along with a corresponding outflow within Capital expenditures, in the Consolidated Statement of Cash Flows. As of December 31, 2014, the Company had recorded construction costs related to Houston Hobby of $64 million. | ||||||||||||
Los Angeles International Airport | ||||||||||||
In March 2013, the Company executed a lease agreement with Los Angeles World Airports (“LAWA”), which owns and operates Los Angeles International Airport ("LAX"). Under the lease agreement, which was amended in June 2014, the Company will oversee and manage the design, development, financing, construction and commissioning of the airport's Terminal 1 Modernization Project (the “Project”) at a cost not to exceed $525 million. The Project will be funded using the Regional Airports Improvement Corporation ("RAIC"), which is a quasi-governmental special purpose entity which will act as a conduit borrower under a syndicated credit facility provided by a group of lenders. Loans made under the credit facility will be used to fund the development of the Project, and the outstanding loans will be repaid with the proceeds of LAWA’s payments to purchase completed Project phases. The Company has guaranteed the obligations of the RAIC under the credit facility. Construction on the project began during 2014. The Company believes that due to its agreed upon role in overseeing and managing the project, it is considered the owner of the project for accounting purposes. As of December 31, 2014, the Company had recorded construction costs related to LAX of $52 million, which are classified with Assets constructed for others and as Construction obligation in the accompanying Consolidated Balance Sheet. | ||||||||||||
Dallas Love Field | ||||||||||||
During 2008, the City of Dallas approved the Love Field Modernization Program (“LFMP”), a project to reconstruct Dallas Love Field with modern, convenient air travel facilities. Pursuant to a Program Development Agreement with the City of Dallas and the Love Field Airport Modernization Corporation (or “LFAMC,” a Texas non-profit “local government corporation” established by the City of Dallas to act on the City of Dallas' behalf to facilitate the development of the LFMP), the Company is managing this project. Major construction commenced during 2010. The project consists of the complete replacement of gate facilities with a new 20-gate facility, including infrastructure, systems and equipment, aircraft parking apron, fueling system, roadways and terminal curbside, baggage handling systems, passenger loading bridges and support systems, and other supporting infrastructure. New ticketing and check-in areas opened during fourth quarter 2012, 12 new gates and new concessions opened in 2013, and the remaining gates opened during October 2014. The majority of the project had been completed as of December 31, 2014. | ||||||||||||
It is currently expected that the total construction costs associated with the LFMP project will be approximately $519 million. Although the City of Dallas has received commitments from various sources that are helping to fund portions of the LFMP project, including the Federal Aviation Administration (“FAA”), the Transportation Security Administration, and the City of Dallas' Aviation Fund, the majority of the funds used are from the issuance of bonds. During fourth quarter 2010, $310 million of such bonds were issued by the LFAMC, and the Company has guaranteed principal and interest payments on the bonds. An additional tranche of such bonds totaling $146 million was issued during second quarter 2012, and the Company has guaranteed the principal and interest payments on these bonds as well. The Company currently expects that as a result of the funding commitments from the above mentioned sources and the bonds that have been issued thus far, no further bond issuances guaranteed by the Company will be required to complete the LFMP project. | ||||||||||||
In conjunction with the Company's significant presence at Dallas Love Field, its rights to occupy 16 of the available gates upon completion of the facility, and other factors, the Company agreed to manage the majority of the LFMP project. In January 2015, the Company announced a long-term sublease agreement that will transfer usage of two additional gates, giving the Company 18 gates in the newly rebuilt 20-gate facility at Dallas Love Field. Based on these facts, the Company evaluated its ongoing accounting requirements in consideration of accounting guidance provided for lessees involved in asset construction. The Company has recorded and will continue to record an asset and corresponding obligation for the cost of the LFMP project until final completion of the project. As of December 31, 2014, the Company had recorded LFMP construction costs of $504 million within Assets constructed for others and had recorded a liability of $501 million within Construction obligation in its Consolidated Balance Sheet. Upon completion of different phases of the LFMP project, the Company has placed the associated assets in service and has begun depreciating the assets over their estimated useful lives. The amount of depreciation recorded for the year ended December 31, 2014, associated with the LFMP assets in service was $20 million. The corresponding LFMP liabilities will be reduced primarily through the Company's airport rental payments to the City of Dallas as the construction costs of the project are passed through to the Company via recurring airport rates and charges. A portion of these payments are reflected as Repayment of construction obligation in the Consolidated Statement of Cash Flows. Further, future contractual airport rental payments to the City of Dallas are included in the schedule of future minimum lease payments in Note 7. The Company records interest expense on the Construction obligation at an imputed rate based on the outstanding bonds. | ||||||||||||
The LFMP Construction is the only Asset Constructed for Others which has been placed into service as of December 31, 2014, and its associated projects are estimated to have a weighted average useful life of 27 years and a residual value of 17%. | ||||||||||||
Contingencies | ||||||||||||
The Company is from time to time subject to various legal proceedings and claims arising in the ordinary course of business, including, but not limited to, examinations by the IRS. The Company's management does not expect that the outcome in any of its currently ongoing legal proceedings or the outcome of any adjustments presented by the IRS, individually or collectively, will have a material adverse effect on the Company's financial condition, results of operations, or cash flow. |
SUPPLEMENTAL_FINANCIAL_INFORMA
SUPPLEMENTAL FINANCIAL INFORMATION | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Disclosure Text Block [Abstract] | |||||||||
SUPPLEMENTAL FINANCIAL INFORMATION | SUPPLEMENTAL FINANCIAL INFORMATION | ||||||||
(in millions) | 31-Dec-14 | 31-Dec-13 | |||||||
Derivative contracts | $ | 13 | $ | 145 | |||||
Intangible assets | 363 | 166 | |||||||
Non-current investments | 35 | 44 | |||||||
Other | 123 | 175 | |||||||
Other assets | $ | 534 | $ | 530 | |||||
(in millions) | 31-Dec-14 | 31-Dec-13 | |||||||
Accounts payable trade | $ | 123 | $ | 189 | |||||
Salaries payable | 160 | 156 | |||||||
Taxes payable | 163 | 146 | |||||||
Aircraft maintenance payable | 314 | 331 | |||||||
Fuel payable | 85 | 102 | |||||||
Other payable | 358 | 323 | |||||||
Accounts payable | $ | 1,203 | $ | 1,247 | |||||
(in millions) | 31-Dec-14 | 31-Dec-13 | |||||||
Profitsharing and savings plans | $ | 374 | $ | 244 | |||||
Aircraft and other lease related obligations | 159 | 173 | |||||||
Vacation pay | 292 | 278 | |||||||
Health | 84 | 73 | |||||||
Derivative contracts | 174 | 12 | |||||||
Workers compensation | 165 | 161 | |||||||
Property and other taxes | 81 | 65 | |||||||
Other | 236 | 223 | |||||||
Accrued liabilities | $ | 1,565 | $ | 1,229 | |||||
(in millions) | 31-Dec-14 | 31-Dec-13 | |||||||
Postretirement obligation | $ | 169 | $ | 138 | |||||
Non-current lease-related obligations | 193 | 290 | |||||||
Other deferred compensation | 174 | 163 | |||||||
Deferred gains from sale and leaseback of aircraft | 53 | 65 | |||||||
Derivative contracts | 622 | 45 | |||||||
Other | 44 | 70 | |||||||
Other non-current liabilities | $ | 1,255 | $ | 771 | |||||
Other Operating Expenses | |||||||||
Other operating expenses consist of distribution costs, advertising expenses, personnel expenses, professional fees, and other operating costs, none of which individually exceed 10 percent of Operating expenses. |
LONGTERM_DEBT
LONG-TERM DEBT | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
LONG-TERM DEBT | LONG-TERM DEBT | ||||||||
(in millions) | 31-Dec-14 | 31-Dec-13 | |||||||
5.25% Notes due 2014 | — | 357 | |||||||
5.75% Notes due 2016 | 313 | 320 | |||||||
5.25% Convertible Senior Notes due 2016 | 113 | 115 | |||||||
5.125% Notes due 2017 | 316 | 322 | |||||||
Fixed-rate 717 Aircraft Notes payable through 2017—10.37% | — | 41 | |||||||
French Credit Agreements due 2018—1.06% | 36 | 46 | |||||||
Fixed-rate 737 Aircraft Notes payable through 2018—7.02% | 24 | 30 | |||||||
2.75% Notes due 2019 | 300 | — | |||||||
Term Loan Agreement due 2019—6.315% | 178 | 210 | |||||||
Term Loan Agreement due 2019—6.84% | 73 | 85 | |||||||
Term Loan Agreement due 2020—5.223% | 372 | 413 | |||||||
Floating-rate 737 Aircraft Notes payable through 2020 | 300 | 340 | |||||||
Pass Through Certificates due 2022—6.24% | 355 | 371 | |||||||
7.375% Debentures due 2027 | 134 | 136 | |||||||
Capital leases (Note 7) | 199 | 56 | |||||||
$ | 2,713 | $ | 2,842 | ||||||
Less current maturities | 258 | 629 | |||||||
Less debt discount and issuance costs | 21 | 22 | |||||||
$ | 2,434 | $ | 2,191 | ||||||
AirTran Long-Term Debt | |||||||||
AirTran Holdings previously entered into aircraft purchase financing facilities, under which a total of 22 737-700 aircraft were financed as of December 31, 2014. | |||||||||
As of December 31, 2014, after prepaying aircraft secured term loans for eight aircraft during 2012 and the first half of 2013, 19 Boeing 737 aircraft remain that were financed under floating-rate facilities. Each note is secured by a first mortgage on the aircraft to which it relates. The notes bear interest at a floating rate per annum equal to a margin plus the three or six-month LIBOR in effect at the commencement of each semi-annual or three-month period, as applicable. As of December 31, 2014, the weighted average interest rate was 1.66 percent. Principal and interest under the notes are payable semi-annually or every three months as applicable. As of December 31, 2014, the remaining debt outstanding may be prepaid without penalty under all aircraft loans provided under such facilities. The notes mature in years 2016 to 2020. As discussed further in Note 10, a portion of the above floating-rate debt has been effectively converted to a fixed rate via interest rate swap agreements which expire between 2016 and 2020. | |||||||||
As of December 31, 2014, three Boeing 737 aircraft were financed under a fixed-rate facility. Each note is secured by a first mortgage on the aircraft to which it relates. As of December 31, 2014, the weighted average interest rate was 7.02 percent. Payments of principal and interest under the notes are due semi-annually. The notes mature in years 2016 to 2018. | |||||||||
As of December 31, 2014, Boeing 717 aircraft previously pledged as collateral for the obligations related to enhanced equipment trust certificates (EETCs) were paid in full. On April 1, 2014, the Company prepaid a portion of its Fixed-rate 717 Aircraft Notes payable in the amount of $35 million prior to their 2017 maturity date. On October 1, 2014, the Company prepaid the remainder of its Fixed-rate 717 Aircraft Notes payable in the amount of $7 million. As a result of the early repayment, the Company incurred a $6 million make-whole penalty, representing the present value of the future interest payments on the notes, which is reflected as a component of Interest expense in the Consolidated Statement of Income. In addition, the Company wrote off the remainder of its unamortized debt premium associated with these notes in second quarter 2014, in the amount of $5 million, which is reflected as a reduction to Interest expense in the Consolidated Statement of Income. | |||||||||
In October 2009, AirTran Holdings completed a public offering of $115 million of convertible senior notes due in 2016. Such notes bear interest at 5.25 percent payable semi-annually, in arrears, on May 1 and November 1. As a result of the acquisition and subsequent dividends declared by the Company, the convertible senior notes are convertible into AirTran conversion units of 167.5224 per $1,000 in principal amount of such notes. Based on the terms of the merger agreement, the holders of these notes would receive shares of the Company’s common stock at a conversion rate of 53.7747 shares and $615.16 in cash per $1,000 in principal amount of such notes. This conversion rate is subject to adjustment under certain circumstances such as: granting of stock and cash dividends, a make-whole fundamental change of ownership provision, the issuance of rights or warrants, and/or a distribution of capital stock. Subsequent to the acquisition, holders of $5 million in principal amount elected to convert their notes. Remaining holders may convert their convertible senior notes into cash and shares of common stock at their option at any time. As such, the Company has classified $68 million, which is the cash portion the Company would be required to pay upon conversion, as current maturities in the Consolidated Balance Sheet. The convertible senior notes are not redeemable at the Company’s option prior to maturity. The holders of the convertible senior notes may require the Company to repurchase such notes, in whole or in part, for cash upon the occurrence of a fundamental change, as defined in the governing supplemental indenture, at a repurchase price of 100 percent of the principal amount plus any accrued and unpaid interest. | |||||||||
As a result of triggering the fundamental change of ownership provision in the convertible senior notes and as a result of the acquisition, an embedded conversion option is deemed to exist. In accordance with applicable accounting guidance, the embedded conversion option was effectively separated and accounted for as a free-standing derivative. A fair value calculation, utilizing similar market yields and the Company’s common stock price, was performed for the debt with and without the equity to measure the equity component. The value allocated to the conversion option of $35 million is classified as permanent equity. The estimated premium associated with the notes excluding the equity feature was $10 million, and is being amortized to interest expense over the remaining life of the notes. The dilutive effect of the shares that would be issued if the convertible notes were converted is considered in the Company’s net income per share calculations, unless such conversion would be considered antidilutive. See Note 3. | |||||||||
Other Company Long-Term Debt | |||||||||
During November 2014, the Company issued $300 million senior unsecured notes due 2019. The notes bear interest at 2.75 percent, payable semi-annually in arrears on May 6 and November 6. Concurrently, the Company entered into a fixed-to-floating interest rate swap to convert the interest on these unsecured notes to a floating rate until their maturity. See Note 10 for further information on the interest-rate swap agreement. | |||||||||
On April 29, 2009, the Company entered into a term loan agreement providing for loans to the Company aggregating up to $332 million, to be secured by mortgages on 14 of the Company’s 737-700 aircraft. The Company borrowed the full $332 million and secured the loan with the requisite 14 aircraft mortgages. The loan matures on May 6, 2019, and is being repaid via quarterly installments of principal that began August 6, 2009. The loan bears interest at the LIBO Rate (as defined in the term loan agreement) plus 3.30 percent, and interest is payable quarterly, which payments began on August 6, 2009. Pursuant to the terms of the term loan agreement, the Company entered into an interest rate swap agreement to convert the variable rate on the term loan to a fixed 6.315 percent until maturity. | |||||||||
On July 1, 2009, the Company entered into a term loan agreement providing for loans to the Company aggregating up to $124 million, to be secured by mortgages on five of the Company’s 737-700 aircraft. The Company has borrowed the full $124 million and secured this loan with the requisite five aircraft mortgages. The loan matures on July 1, 2019, and is repayable semi-annually in installments of principal that began January 1, 2010. The loan bears interest at a fixed rate of 6.84 percent, and interest is payable semi-annually, which payments began on January 1, 2010. | |||||||||
On May 6, 2008, the Company entered into a term loan agreement providing for loans to the Company aggregating up to $600 million, to be secured by first-lien mortgages on 21 of the Company’s 737-700 aircraft. On May 9, 2008, the Company borrowed the full $600 million and secured these loans with the requisite 21 aircraft mortgages. The loans mature on May 9, 2020, and are repayable quarterly in installments of principal, with the first payment made on August 9, 2008. The loans bear interest at the LIBO Rate (as defined in the term loan agreement) plus 0.95 percent, and interest is payable quarterly. Pursuant to the terms of the term loan agreement, the Company entered into an interest rate swap agreement to convert the variable rate on the term loan to a fixed 5.223 percent until maturity. | |||||||||
On October 3, 2007, grantor trusts established by the Company issued $500 million Pass Through Certificates consisting of $412 million 6.15% Series A certificates and $88 million 6.65% Series B certificates. A separate trust was established for each class of certificates. The trusts used the proceeds from the sale of certificates to acquire equipment notes in the same amounts, which were issued by the Company on a full recourse basis. Payments on the equipment notes held in each trust will be passed through to the holders of certificates of such trust. The equipment notes were issued for each of 16 Boeing 737-700 aircraft owned by the Company and are secured by a mortgage on each aircraft. Interest on the equipment notes held for the certificates is payable semi-annually, with the first payment made on February 1, 2008. Also beginning February 1, 2008, principal payments on the equipment notes held for both series of certificates are due semi-annually until the balance of the certificates mature on August 1, 2022. Prior to their issuance, the Company also entered into swap agreements to hedge the variability in interest rates on the Pass Through Certificates. The swap agreements were accounted for as cash flow hedges, and resulted in a payment by the Company of $20 million upon issuance of the Pass Through Certificates. The effective portion of the hedge is being amortized to interest expense concurrent with the amortization of the debt and is reflected in the above table as a reduction in the debt balance. The ineffectiveness of the hedge transaction was immaterial. | |||||||||
During December 2006, the Company issued $300 million senior unsecured notes due 2016. The notes bear interest at 5.75 percent, payable semi-annually in arrears, with the first payment made on June 15, 2007. During fourth quarter 2009, the Company entered into a fixed-to-floating interest rate swap to convert the interest on these unsecured notes to a floating rate until their maturity. See Note 10 for further information on the interest-rate swap agreement. | |||||||||
During February 2005, the Company issued $300 million senior unsecured notes due 2017. The notes bear interest at 5.125 percent, payable semi-annually in arrears, with the first payment made on September 1, 2005. | |||||||||
In fourth quarter 2004, the Company entered into four identical 13-year floating-rate financing arrangements, whereby it borrowed a total of $112 million from French banking partnerships. Although the interest rates on the borrowings float, the Company estimated at inception that, considering the full effect of the “net present value benefits” included in the transactions, the effective economic yield over the 13-year term of the loans will be approximately LIBOR minus 45 basis points. Principal and interest are payable semi-annually on June 30 and December 31 for each of the loans, and the Company may terminate the arrangements in any year on either of those dates, under certain conditions. The Company pledged four aircraft as collateral for the transactions. | |||||||||
In September 2004, the Company issued $350 million senior unsecured notes due 2014. The notes matured and were redeemed in full on October 1, 2014, utilizing available cash on hand. | |||||||||
On February 28, 1997, the Company issued $100 million of senior unsecured 7.375% debentures due March 1, 2027. Interest is payable semi-annually on March 1 and September 1. The debentures may be redeemed, at the option of the Company, in whole at any time or in part from time to time, at a redemption price equal to the greater of the principal amount of the debentures plus accrued interest at the date of redemption or the sum of the present values of the remaining scheduled payments of principal and interest thereon, discounted to the date of redemption at the comparable treasury rate plus 20 basis points, plus accrued interest at the date of redemption. In January 2007, the Company entered into an interest rate swap agreement to convert this fixed-rate debt to a floating rate; however, the interest rate swap was terminated in December 2012. See Note 10 for more information on the interest rate swap agreement and termination. | |||||||||
The Company is required to provide standby letters of credit to support certain obligations that arise in the ordinary course of business. Although the letters of credit are an off-balance sheet item, the majority of the obligations to which they relate are reflected as liabilities in the Consolidated Balance Sheet. Outstanding letters of credit totaled $440 million at December 31, 2014. | |||||||||
The net book value of the assets pledged as collateral for the Company’s secured borrowings, primarily aircraft and engines, was $2.0 billion at December 31, 2014. In addition, the Company has pledged a total of up to 81 of its Boeing 737-700 aircraft at a net book value of $2.0 billion, in the case that it has obligations related to its fuel derivative instruments with counterparties that exceed certain thresholds. See Note 10 for further information on these collateral arrangements. | |||||||||
As of December 31, 2014, aggregate annual principal maturities of debt and capital leases (not including amounts associated with interest rate swap agreements, interest on capital leases, amortization of capital lease incentives, and amortization of purchase accounting adjustments) for the five-year period ending December 31, 2019 and thereafter, were $182 million in 2015, $610 million in 2016, $520 million in 2017, $264 million in 2018, $514 million in 2019, and $551 million thereafter. |
LEASES
LEASES | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||
LEASES | LEASES | |||||||||||||||||||
The Company's fleet includes 16 aircraft on capital lease, including two B717s, as of December 31, 2014, compared with four aircraft on capital lease as of December 31, 2013. Amounts applicable to these aircraft that are included in property and equipment were: | ||||||||||||||||||||
(in millions) | 2014 | 2013 | ||||||||||||||||||
Flight equipment | $ | 214 | $ | 69 | ||||||||||||||||
Less: accumulated amortization | 22 | 12 | ||||||||||||||||||
$ | 192 | $ | 57 | |||||||||||||||||
Total rental expense for operating leases, both aircraft and other, charged to operations in 2014, 2013, and 2012 was $931 million, $997 million, and $943 million, respectively. The majority of the Company’s terminal operations space, as well as 174 aircraft, which includes 76 B717s, were under operating leases at December 31, 2014. For aircraft operating leases and for terminal operations leases, expense is included in Aircraft rentals and in Landing fees and other rentals, respectively, in the Consolidated Statement of Income. Future minimum lease payments under capital leases and noncancelable operating leases and rentals to be received under subleases with initial or remaining terms in excess of one year at December 31, 2014, were: | ||||||||||||||||||||
(in millions) | Capital | Operating | Subleases | LFMP facility lease* | Operating | |||||||||||||||
leases | leases | leases, net | ||||||||||||||||||
2015 | $ | 33 | $ | 753 | $ | (93 | ) | $ | 24 | $ | 684 | |||||||||
2016 | 42 | 715 | (103 | ) | 24 | 636 | ||||||||||||||
2017 | 45 | 671 | (103 | ) | 24 | 592 | ||||||||||||||
2018 | 44 | 573 | (102 | ) | 25 | 496 | ||||||||||||||
2019 | 43 | 502 | (97 | ) | 25 | 430 | ||||||||||||||
Thereafter | 202 | 1,802 | (144 | ) | 659 | 2,317 | ||||||||||||||
Total minimum lease payments | $ | 409 | $ | 5,016 | $ | (642 | ) | $ | 781 | $ | 5,155 | |||||||||
Less amount representing interest | 75 | |||||||||||||||||||
Present value of minimum lease payments | 334 | |||||||||||||||||||
Less current portion | 23 | |||||||||||||||||||
Long-term portion | $ | 311 | ||||||||||||||||||
* See Note 4 for further details | ||||||||||||||||||||
The aircraft leases generally can be renewed for one to five years at rates based on fair market value at the end of the lease term. Most aircraft leases have purchase options at or near the end of the lease term at fair market value, generally limited to a stated percentage of the lessor’s defined cost of the aircraft. | ||||||||||||||||||||
During fourth quarter 2013, the Company entered into sale and leaseback transactions with a third party aircraft lessor for the sale and leaseback of two Boeing 737-800 aircraft. The transactions were closed on the date of delivery from Boeing, and resulted in the delivery payments being made by the aircraft lessor directly to Boeing, and Southwest being refunded the $12 million in progress payments it had previously made to Boeing during the period the aircraft was being constructed. These transactions resulted in deferred gains that are not material, which are being amortized over the terms of the respective leases, which are both 11 years. Both of the leases from these sale and leaseback transactions are accounted for as operating leases. Under the terms of the lease agreements, the Company will continue to operate and maintain the aircraft. Payments under the lease agreements are fixed. The lease agreements contain standard termination events, including termination upon a breach of the Company's obligations to make rental payments and upon any other material breach of the Company's obligations under the leases, and standard maintenance and return condition provisions. Upon a termination of the lease due to a breach by the Company, the Company would be liable for standard contractual damages, possibly including damages suffered by the lessor in connection with remarketing the aircraft or while the aircraft is not leased to another party. | ||||||||||||||||||||
On July 9, 2012, the Company signed an agreement with Delta Air Lines, Inc. and Boeing Capital Corp. to lease or sublease all 88 of AirTran's B717s to Delta at agreed-upon lease rates. The first converted B717 was delivered to Delta in September 2013, and as of December 31, 2014, the Company had delivered a total of 52 B717s to Delta. Over the expected term of the transition period for all B717s, the Company expects to average approximately three B717 conversions per month; however, as the Company previously announced, all B717s remaining at Southwest were grounded on December 28, 2014. A portion of the B717 fleet that will not be delivered to Delta until the second half of 2015 has been placed in storage until each aircraft is ready to be converted. A total of 76 of the B717s are on operating lease, ten are owned, and two are on capital lease. | ||||||||||||||||||||
The Company has paid and will continue to pay the majority of the costs to convert the aircraft to the Delta livery and perform certain maintenance checks prior to the delivery of each aircraft. The agreement to pay these conversion and maintenance costs is a “lease incentive” under applicable accounting guidance. The sublease terms for the 76 B717s on operating lease and the two B717s on capital lease coincide with the Company's remaining lease terms for these aircraft from the original lessor, which range from approximately three to nine years. The leasing of the ten B717s that are owned by the Company is subject to certain conditions, and the lease terms are for seven years, after which Delta will have the option to purchase the aircraft at the then-prevailing market value. The Company accounts for the lease and sublease transactions with Delta as operating leases, except for the two aircraft classified by the Company as capital leases. The subleases of the two capital lease aircraft are accounted for as direct financing leases. There are no contingent payments and no significant residual value conditions associated with the transaction. | ||||||||||||||||||||
The accounting for this transaction is based on the guidance provided for lease transactions. For the components of this transaction finalized in third quarter 2012 and with respect to which the lease inception has been deemed to occur, the Company recorded a charge of approximately $137 million during third quarter 2012. The charge represents the remaining estimated cost, at the scheduled date of delivery of each B717 to Delta (including the conversion, maintenance, and other contractual costs to be incurred), of the Company's lease of the 76 B717s that are accounted for as operating leases, net of the future sublease income from Delta and the remaining unfavorable aircraft lease liability established as of the acquisition date. During 2014, the Company recorded an additional $22 million in expense for its revised estimate of conversion costs for these B717s. The charges recorded by the Company for this transaction were included as a component of Acquisition and integration costs in the Company's Consolidated Statement of Income and were included as a component of Other, net in Cash flows from operating activities in the Company's Consolidated Statement of Cash Flows, and the corresponding liability for this transaction is included as a component of Current liabilities and Other noncurrent liabilities in the Company's Consolidated Balance Sheet. A rollforward of the Company's B717 lease/sublease liability for 2014 and 2013 is shown below: | ||||||||||||||||||||
(in millions) | B717 lease/sublease liability | |||||||||||||||||||
Balance at December 31, 2012 | $ | 128 | ||||||||||||||||||
Lease/sublease accretion | 6 | |||||||||||||||||||
Lease/sublease payments, net (a) | (12 | ) | ||||||||||||||||||
Balance at December 31, 2013 | $ | 122 | ||||||||||||||||||
Lease/sublease accretion | 5 | |||||||||||||||||||
Lease/sublease expense adjustment | 22 | |||||||||||||||||||
Lease/sublease payments, net (a) | (86 | ) | ||||||||||||||||||
Balance at December 31, 2014 | $ | 63 | ||||||||||||||||||
(a) Includes lease conversion cost payments | ||||||||||||||||||||
The Company halted service of its B717 fleet as of December 28, 2014, and as a result recorded an additional $9 million charge associated with the extension of the time between when the Company removed the aircraft from revenue service and when they enter the conversion process. |
COMMON_STOCK
COMMON STOCK | 12 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
COMMON STOCK | COMMON STOCK |
The Company has one class of capital stock, its common stock. Holders of shares of common stock are entitled to receive dividends when and if declared by the Board of Directors and are entitled to one vote per share on all matters submitted to a vote of the Shareholders. At December 31, 2014, the Company had 47 million shares of common stock reserved for issuance pursuant to Employee equity plans (of which 20 million shares had not been granted) through various share-based compensation arrangements. See Note 9 to the Consolidated Financial Statements for information regarding the Company's equity plans. |
STOCK_PLANS
STOCK PLANS | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||
STOCK PLANS | STOCK PLANS | |||||||||||||
Share-based compensation | ||||||||||||||
The Company accounts for share-based compensation utilizing fair value. The Consolidated Statement of Income for the years ended December 31, 2014, 2013, and 2012, reflects share-based compensation expense of $21 million, $18 million, and $16 million, respectively. The total tax benefit recognized in earnings from share-based compensation arrangements for the years ended December 31, 2014, 2013, and 2012, was not material. As of December 31, 2014, there was $33 million of total unrecognized compensation cost related to share-based compensation arrangements, which is expected to be recognized over a weighted-average period of 1.1 years. | ||||||||||||||
Restricted stock units and stock grants | ||||||||||||||
Under the Company’s Amended and Restated 2007 Equity Incentive Plan (“2007 Equity Plan”), it granted restricted stock units (“RSUs”) to certain Employees during 2012, 2013, and 2014 and performance-based restricted stock units (“PBRSUs”) to certain Employees during 2014. The fair value of RSUs and PBRSUs is based on the closing price of the Company’s common stock on the date of grant. Outstanding RSUs vest over three years, subject generally to the individual’s continued employment or service. The PBRSUs vest on May 14, 2017, subject to the Company’s performance with respect to a three-year simple average of Return on Invested Capital, before taxes and excluding special items ("ROIC"), for the period beginning on January 1, 2014 and ending on December 31, 2016, and the individual’s continued employment or service. The number of PBRSUs vesting on the vesting date will be interpolated based on the average ROIC for the defined performance period, and ranges from zero PBRSUs at an average ROIC of 12 percent or lower to 200 percent of granted PBRSUs at an average ROIC of 20 percent or higher. The Company recognizes all expense on a straight-line basis over the vesting period, with any changes in expense due to the number of PBRSUs expected to vest being modified on a prospective basis. | ||||||||||||||
In addition, the Company granted approximately 36 thousand shares of unrestricted stock at a weighted average grant price of $24.91 in 2014, approximately 63 thousand shares at a weighted average grant price of $14.34 in 2013, and approximately 82 thousand shares at a weighted average grant price of $8.21 in 2012, to members of its Board of Directors. The fair value of unrestricted stock grants is also based on the closing price of the Company’s common stock on the date of grant. | ||||||||||||||
A remaining balance of up to ten million shares of the Company’s common stock may be issued pursuant to grants under the 2007 Equity Plan. Aggregated information regarding the Company’s RSUs and PBRSUs is summarized below: | ||||||||||||||
All Restricted Stock Units | ||||||||||||||
Units (000) | Wtd. Average | |||||||||||||
Fair Value | ||||||||||||||
(per share) | ||||||||||||||
Outstanding December 31, 2011, Unvested | 1,640 | $ | 12.27 | |||||||||||
Granted | 1,939 | 8.21 | ||||||||||||
Vested | (644 | ) | 12.27 | |||||||||||
Surrendered | (59 | ) | 10.54 | |||||||||||
Outstanding December 31, 2012 | 2,876 | 9.57 | ||||||||||||
Granted | 1,139 | 14.34 | ||||||||||||
Vested | (1,263 | ) | 10.24 | |||||||||||
Surrendered | (168 | ) | 9.11 | |||||||||||
Outstanding December 31, 2013 | 2,584 | 11.38 | ||||||||||||
Granted | 834 | (a) | 24.93 | |||||||||||
Vested | (1,239 | ) | 11.05 | |||||||||||
Surrendered | (102 | ) | 13.18 | |||||||||||
Outstanding December 31, 2014, Unvested | 2,077 | $ | 16.92 | |||||||||||
(a) Includes 198 thousand shares of PBRSUs | ||||||||||||||
Stock options | ||||||||||||||
The Company has previously awarded stock options under plans covering Employees subject to collective bargaining agreements (collective bargaining plans) and plans covering other Employees and members of the Board of Directors (other Employee plans). None of the collective bargaining plans were required to be approved by Shareholders. Options granted to Employees under collective bargaining plans are non-qualified, granted at or above the fair value of the Company’s common stock on the date of grant, and generally have terms ranging from six to twelve years. There were no material grants of stock options to Employees covered by collective bargaining plans during 2012, 2013, or 2014, and no future option grants from these plans are possible. Neither Executive Officers nor members of the Company’s Board of Directors are eligible to participate in any of the collective bargaining plans. Options granted to Employees and members of the Board of Directors through other Employee plans are both qualified as incentive stock options under the Internal Revenue Code of 1986 and non-qualified stock options, granted at no less than the fair value of the Company’s common stock on the date of grant, and have 10-year terms. All of the options included in other Employee plans have been approved by Shareholders, except one plan covering non-management, non-contract Employees, which did not require Shareholder approval and had an insignificant number of options outstanding as of December 31, 2014. Although the Company does not have a formal policy, upon option exercise, the Company will typically issue treasury stock, to the extent such shares are available. | ||||||||||||||
For other Employee plans, options vest and generally become fully exercisable over three, five, or ten years of continued employment, depending upon the grant type. For grants in any of the Company’s plans that are subject to graded vesting over a service period, the Company recognizes expense on a straight-line basis over the requisite service period for the entire award. None of the Company’s stock option grants include performance-based or market-based vesting conditions, as defined. | ||||||||||||||
The Black-Scholes option valuation model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of subjective assumptions including expected stock price volatility. The Company estimates expected stock price volatility via observations of both historical volatility trends as well as implied future volatility observations as determined by independent third parties. Stock options issued by the Company during 2014, 2013, and 2012 were immaterial. | ||||||||||||||
Aggregated information regarding Company issued stock options is summarized below: | ||||||||||||||
Stock Option Plans | ||||||||||||||
Options | Wtd. | Wtd. | Aggregate | |||||||||||
0 | average | average | intrinsic | |||||||||||
exercise | remaining | value | ||||||||||||
price | contractual | (millions) | ||||||||||||
term | ||||||||||||||
(years) | ||||||||||||||
Outstanding December 31, 2011 | 47,324 | $ | 14.51 | |||||||||||
Granted | 6 | 9 | ||||||||||||
Exercised | (573 | ) | 8 | |||||||||||
Surrendered | (27,847 | ) | 14.85 | |||||||||||
Outstanding December 31, 2012 | 18,910 | $ | 14.19 | |||||||||||
Granted | — | — | ||||||||||||
Exercised | (6,633 | ) | 13.31 | |||||||||||
Surrendered | (3,116 | ) | 14.94 | |||||||||||
Outstanding December 31, 2013 | 9,161 | $ | 14.58 | |||||||||||
Granted | — | — | ||||||||||||
Exercised | (6,636 | ) | 14.36 | |||||||||||
Surrendered | (48 | ) | 15.74 | |||||||||||
Outstanding December 31, 2014 | 2,477 | $ | 15.17 | 1.62 | $ | 67 | ||||||||
Vested or expected to vest at December 31, 2014 | 2,473 | $ | 15.16 | 1.63 | $ | 67 | ||||||||
Exercisable at December 31, 2014 | 2,308 | $ | 15.05 | 1.67 | $ | 63 | ||||||||
The total aggregate intrinsic value of options exercised for all plans during the years ended December 31, 2014, 2013, and 2012, was $75 million, $22 million, and $1 million, respectively. The total grant date fair value of shares vesting during the years ended December 31, 2014, 2013, and 2012, was $15 million, $16 million, and $13 million, respectively. | ||||||||||||||
Employee Stock Purchase Plan | ||||||||||||||
Under the amended 1991 Employee Stock Purchase Plan (ESPP), which has been approved by Shareholders, the Company is authorized to issue up to a remaining balance of 11 million shares of the Company’s common stock to Employees of the Company. These shares may be issued at a price equal to 90 percent of the market value at the end of each monthly purchase period. Common stock purchases are paid for through periodic payroll deductions. For the years ended December 31, 2014, 2013, and 2012, participants under the plan purchased 792 thousand shares, 1.5 million shares, and 2.2 million shares at average prices of $23.17, $12.03, and $8.01, respectively. The weighted-average fair value of each purchase right under the ESPP granted for the years ended December 31, 2014, 2013, and 2012, which is equal to the ten percent discount from the market value of the Common Stock at the end of each monthly purchase period, was $2.68, $1.34, and $0.89, respectively. | ||||||||||||||
Taxes | ||||||||||||||
A portion of the Company’s granted options qualify as incentive stock options for income tax purposes. As such, a tax benefit is not recorded at the time the compensation cost related to the options is recorded for book purposes due to the fact that an incentive stock option does not ordinarily result in a tax benefit unless there is a disqualifying disposition. Grants of non-qualified stock options result in the creation of a deferred tax asset, which is a temporary difference, until the time that the option is exercised. Due to the treatment of incentive stock options for tax purposes, the Company’s effective tax rate from year to year is subject to variability. |
FINANCIAL_DERIVATIVE_INSTRUMEN
FINANCIAL DERIVATIVE INSTRUMENTS | 12 Months Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS | FINANCIAL DERIVATIVE INSTRUMENTS | |||||||||||||||||||||||||||||||
Fuel contracts | ||||||||||||||||||||||||||||||||
Airline operators are inherently dependent upon energy to operate and, therefore, are impacted by changes in jet fuel prices. Furthermore, jet fuel and oil typically represent one of the largest operating expenses for airlines. The Company endeavors to acquire jet fuel at the lowest possible cost and to reduce volatility in operating expenses through its fuel hedging program. Although the Company may periodically enter into jet fuel derivatives for short-term timeframes, because jet fuel is not widely traded on an organized futures exchange, there are limited opportunities to hedge directly in jet fuel for time horizons longer than approximately 24 months into the future. However, the Company has found that financial derivative instruments in other commodities, such as West Texas Intermediate (“WTI”) crude oil, Brent crude oil, and refined products, such as heating oil and unleaded gasoline, can be useful in decreasing its exposure to jet fuel price volatility. The Company does not purchase or hold any financial derivative instruments for trading or speculative purposes. | ||||||||||||||||||||||||||||||||
The Company has used financial derivative instruments for both short-term and long-term time frames, and primarily uses a mixture of purchased call options, collar structures (which include both a purchased call option and a sold put option), call spreads (which include a purchased call option and a sold call option), put spreads (which include a purchased put option and a sold put option), and fixed price swap agreements in its portfolio. Although the use of collar structures and swap agreements can reduce the overall cost of hedging, these instruments carry more risk than purchased call options in that the Company could end up in a liability position when the collar structure or swap agreement settles. With the use of purchased call options and call spreads, the Company cannot be in a liability position at settlement, but may be exposed to price changes beyond a certain market price or below. | ||||||||||||||||||||||||||||||||
The Company evaluates its hedge volumes strictly from an “economic” standpoint and thus does not consider whether the hedges have qualified or will qualify for hedge accounting. The Company defines its “economic” hedge as the net volume of fuel derivative contracts held, including the impact of positions that have been offset through sold positions, regardless of whether those contracts qualify for hedge accounting. The level at which the Company is hedged for a particular period is also dependent on current market prices for that period as well as the types of derivative instruments held and the strike prices of those instruments. For example, the Company may enter into “out-of-the-money” option contracts (including catastrophic protection), which may not generate intrinsic gains at settlement if market prices do not rise above the option strike price. Therefore, even though the Company may have an “economic” hedge in place for a particular period, that hedge may not produce any hedging gains and may even produce hedging losses depending on market prices, the types of instruments held, and the strike prices of those instruments. | ||||||||||||||||||||||||||||||||
For 2014, the Company had fuel derivative instruments in place for up to 34 percent of its fuel consumption, and, as a result, recognized $56 million in cash gains in Fuel expense from the settlement of those positions. As of December 31, 2014, the Company has reduced its hedge position related to future years, and thus has no "economic" hedge in place for its 2015 estimated fuel consumption. This reduction in the Company's hedge primarily was accomplished through entering into offsetting derivatives that will also settle in the same periods as the economic hedge derivative. Although a portion of the offsetting derivatives were sold swap positions and thus required no cash payment, the Company did pay $217 million to counterparties during fourth quarter 2014 to purchase offsetting derivatives that will settle in 2015 and 2018. These payments effectively serve to reduce the payments to counterparties that would have been required when the original economic derivatives settle in those future periods. However, to the extent the Company utilized hedge accounting for these original derivatives, any losses that had been recorded in AOCI will remain there and be reclassified to earnings in the periods in which the derivatives settle. Also see Note 12 for further information on AOCI. The following table provides information about the Company’s volume of fuel hedging for the years 2015 through 2018 on an “economic” basis considering current market prices: | ||||||||||||||||||||||||||||||||
Fuel hedged as of | ||||||||||||||||||||||||||||||||
31-Dec-14 | Derivative underlying commodity type as of | |||||||||||||||||||||||||||||||
Period (by year) | (gallons in millions) | 31-Dec-14 | ||||||||||||||||||||||||||||||
2015 | — | (b) | ||||||||||||||||||||||||||||||
2016 | 885 | (a) | Brent crude oil, Heating oil, and Gulf Coast jet fuel | |||||||||||||||||||||||||||||
2017 | 757 | (a) | WTI crude and Brent crude oil | |||||||||||||||||||||||||||||
2018 | — | (b) | ||||||||||||||||||||||||||||||
(a) Due to the types of derivatives utilized by the Company and different price levels of those contracts, these volumes represent the maximum economic hedge in place and may vary significantly as market prices fluctuate. | ||||||||||||||||||||||||||||||||
(b) In response to the precipitous decline in oil and jet fuel prices during the second half of 2014, the Company took action to offset its 2015 and 2018 fuel derivative portfolios and is now effectively unhedged at current price levels. While the Company still holds derivative contracts as of December 31, 2014, that will settle during 2015 and 2018, the majority of the losses associated with those contracts are substantially locked in. However, if market prices were to increase or decrease significantly related to the 2015 positions prior to these contracts settling, the losses incurred at settlement could be slightly lower or higher than currently expected amounts during that period. | ||||||||||||||||||||||||||||||||
Upon proper qualification, the Company accounts for its fuel derivative instruments as cash flow hedges. Generally, utilizing hedge accounting, all periodic changes in fair value of the derivatives designated as hedges that are considered to be effective are recorded in Accumulated Other Comprehensive Income (Loss) ("AOCI") until the underlying jet fuel is consumed. See Note 12. The Company’s results are subject to the possibility that periodic changes will not be effective, as defined, or that the derivatives will no longer qualify for hedge accounting. Ineffectiveness results when the change in the fair value of the derivative instrument exceeds the change in the value of the Company’s expected future cash outlay to purchase and consume jet fuel. To the extent that the periodic changes in the fair value of the derivatives are ineffective, the ineffective portion is recorded to Other (gains) losses, net in the Consolidated Statement of Income. Likewise, if a hedge ceases to qualify for hedge accounting, any change in the fair value of derivative instruments since the last reporting period is recorded to Other (gains) losses, net, in the Consolidated Statement of Income in the period of the change; however, any amounts previously recorded to AOCI would remain there until such time as the original forecasted transaction occurs, at which time these amounts would be reclassified to Fuel and oil expense. When the Company has sold derivative positions in order to effectively “close” or offset a derivative already held as part of its fuel derivative instrument portfolio, any subsequent changes in fair value of those positions are marked to market through earnings. Likewise, any changes in fair value of those positions that were offset by entering into the sold positions and were de-designated as hedges, are concurrently marked to market through earnings. However, any changes in value related to hedges that were deferred as part of AOCI while designated as a hedge would remain until the originally forecasted transaction occurs. In a situation where it becomes probable that a fuel hedged forecasted transaction will not occur, any gains and/or losses that have been recorded to AOCI would be required to be immediately reclassified into earnings. The Company did not have any such situations occur during 2012, 2013, or 2014. | ||||||||||||||||||||||||||||||||
In some situations, an entire commodity type used in hedging may cease to qualify for special hedge accounting treatment. As an example, during 2013, the Company's routine statistical analysis performed to determine which commodities qualify for special hedge accounting treatment on a prospective basis dictated that WTI crude oil based derivatives no longer qualify for hedge accounting. This is primarily due to the fact that the correlation between WTI crude oil prices and jet fuel prices during recent periods has not been as strong as in the past, and therefore the Company can no longer demonstrate that derivatives based on WTI crude oil prices will result in effective hedges on a prospective basis. As such, the change in fair value of all of the Company's derivatives based in WTI have been recorded to Other (gains) losses subsequent to July 1, 2013, and all future changes in the fair value of such instruments will continue to be recorded directly to earnings in future periods. The change in fair value of the Company's WTI derivative contracts during 2014 was a decrease of $45 million, which resulted in a loss in the Consolidated Statement of Income. The change in fair value of the Company's WTI derivative contracts during the second half of 2013 was an increase of $15 million, which resulted in a gain in the Consolidated Statement of Income. Any amounts previously recorded to AOCI will remain there until such time as the original forecasted transaction occurs in accordance with hedge accounting requirements. The Company will continue to evaluate whether it can qualify for hedge accounting for WTI derivative contracts in future periods. | ||||||||||||||||||||||||||||||||
Ineffectiveness is inherent in hedging jet fuel with derivative positions based in other crude oil related commodities. Due to the volatility in markets for crude oil and related products, the Company is unable to predict the amount of ineffectiveness each period, including the loss of hedge accounting, which could be determined on a derivative by derivative basis or in the aggregate for a specific commodity. This may result, and has resulted, in increased volatility in the Company’s financial results. Factors that have and may continue to lead to ineffectiveness and unrealized gains and losses on derivative contracts include: significant fluctuation in energy prices, the number of derivative positions the Company holds, significant weather events affecting refinery capacity and the production of refined products, and the volatility of the different types of products the Company uses in hedging. However, even though derivatives may not qualify for hedge accounting, the Company continues to hold the instruments as management believes derivative instruments continue to afford the Company the opportunity to stabilize jet fuel costs. | ||||||||||||||||||||||||||||||||
Accounting pronouncements pertaining to derivative instruments and hedging are complex with stringent requirements, including the documentation of a Company hedging strategy, statistical analysis to qualify a commodity for hedge accounting both on a historical and a prospective basis, and strict contemporaneous documentation that is required at the time each hedge is designated by the Company. The Company also examines the effectiveness of each individual hedge and its entire hedging program on a quarterly basis utilizing statistical analysis. This analysis involves utilizing regression and other statistical analyses that compare changes in the price of jet fuel to changes in the prices of the commodities used for hedging purposes. | ||||||||||||||||||||||||||||||||
All cash flows associated with purchasing and selling fuel derivatives are classified as Other operating cash flows in the Consolidated Statement of Cash Flows. The following table presents the location of all assets and liabilities associated with the Company’s hedging instruments within the Consolidated Balance Sheet: | ||||||||||||||||||||||||||||||||
Asset derivatives | Liability derivatives | |||||||||||||||||||||||||||||||
Balance Sheet | Fair value at | Fair value at | Fair value at | Fair value at | ||||||||||||||||||||||||||||
(in millions) | location | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | |||||||||||||||||||||||||||
Derivatives designated as hedges* | ||||||||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Prepaid expenses and other current assets | $ | — | $ | 74 | $ | — | $ | — | |||||||||||||||||||||||
Fuel derivative contracts (gross) | Other assets | — | 209 | — | 1 | |||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Other noncurrent liabilities | — | — | 643 | — | |||||||||||||||||||||||||||
Interest rate derivative contracts | Other assets | 13 | 20 | — | — | |||||||||||||||||||||||||||
Interest rate derivative contracts | Other noncurrent liabilities | — | — | 61 | 77 | |||||||||||||||||||||||||||
Total derivatives designated as hedges | $ | 13 | $ | 303 | $ | 704 | $ | 78 | ||||||||||||||||||||||||
Derivatives not designated as hedges* | ||||||||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Prepaid expenses and other current assets | $ | — | $ | 175 | $ | — | $ | 182 | |||||||||||||||||||||||
Fuel derivative contracts (gross) | Other assets | — | 16 | — | 99 | |||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Accrued liabilities | 1,190 | 9 | 1,432 | 21 | |||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Other noncurrent liabilities | 157 | — | 273 | — | |||||||||||||||||||||||||||
Total derivatives not designated as hedges | $ | 1,347 | $ | 200 | $ | 1,705 | $ | 302 | ||||||||||||||||||||||||
Total derivatives | $ | 1,360 | $ | 503 | $ | 2,409 | $ | 380 | ||||||||||||||||||||||||
* Represents the position of each trade before consideration of offsetting positions with each counterparty and does not include the impact of cash collateral deposits provided to or received from counterparties. See discussion of credit risk and collateral following in this Note. | ||||||||||||||||||||||||||||||||
In addition, the Company also had the following amounts associated with fuel derivative instruments and hedging activities in its Consolidated Balance Sheet: | ||||||||||||||||||||||||||||||||
Balance Sheet | December 31, | December 31, | ||||||||||||||||||||||||||||||
(in millions) | location | 2014 | 2013 | |||||||||||||||||||||||||||||
Cash collateral deposits provided to counterparties for fuel | Offset against Accrued liabilities | $ | 68 | $ | — | |||||||||||||||||||||||||||
contracts - current | ||||||||||||||||||||||||||||||||
Cash collateral deposits provided to counterparties for fuel | Offset against Other noncurrent liabilities | 198 | — | |||||||||||||||||||||||||||||
contracts- noncurrent | ||||||||||||||||||||||||||||||||
Cash collateral deposits provided to counterparties for interest | Offset against Other noncurrent liabilities | — | 32 | |||||||||||||||||||||||||||||
rate contracts - noncurrent | ||||||||||||||||||||||||||||||||
Due to third parties for fuel contracts | Accrued liabilities | 16 | — | |||||||||||||||||||||||||||||
Receivable from third parties for fuel contracts - current | Accounts and other receivables | — | 57 | |||||||||||||||||||||||||||||
All of the Company's fuel derivative instruments and interest rate swaps are subject to agreements that follow the netting guidance in the applicable accounting for derivatives and hedging. The types of derivative instruments the Company has determined are subject to netting requirements in the accompanying Consolidated Balance Sheet are those in which the Company pays or receives cash for transactions with the same counterparty and in the same currency via one net payment or receipt. For cash collateral held by the Company or provided to counterparties, the Company nets such amounts against the fair value of the Company's derivative portfolio by each counterparty. The Company has elected to utilize netting for both its fuel derivative instruments and interest rate swap agreements and also classifies such amounts as either current or noncurrent, based on the net fair value position with each of the Company's counterparties in the Consolidated Balance Sheet. | ||||||||||||||||||||||||||||||||
The Company's application of its netting policy associated with cash collateral differs depending on whether its derivative instruments are in a net asset position or a net liability position. If its fuel derivative instruments are in a net asset position with a counterparty, cash collateral amounts held are first netted against current outstanding derivative amounts associated with that counterparty until that balance is zero, and then any remainder is applied against the fair value of noncurrent outstanding derivative instruments. If the Company's fuel derivative instruments are in a net liability position with the counterparty, cash collateral amounts provided are first netted against noncurrent outstanding derivative amounts associated with that counterparty until that balance is zero, and then any remainder is applied against the fair value of current outstanding derivative instruments. | ||||||||||||||||||||||||||||||||
The Company has the following recognized financial assets and financial liabilities resulting from those transactions that meet the scope of the disclosure requirements as necessitated by applicable accounting guidance for balance sheet offsetting: | ||||||||||||||||||||||||||||||||
Offsetting of derivative assets | ||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||
(i) | (ii) | (iii) =i) + (ii) | (i) | (ii) | (iii) =i) + (ii) | |||||||||||||||||||||||||||
December 31, 2014 | 31-Dec-13 | |||||||||||||||||||||||||||||||
Description | Balance Sheet location | Gross amounts of recognized assets | Gross amounts offset in the Balance Sheet | Net amounts of assets presented in the Balance Sheet | Gross amounts of recognized assets | Gross amounts offset in the Balance Sheet | Net amounts of assets presented in the Balance Sheet | |||||||||||||||||||||||||
Fuel derivative contracts | Prepaid expenses and other current assets | $ | — | $ | — | $ | — | $ | 249 | $ | (182 | ) | $ | 67 | ||||||||||||||||||
Fuel derivative contracts | Other assets | $ | — | $ | — | $ | — | (a) | $ | 225 | $ | (100 | ) | $ | 125 | (a) | ||||||||||||||||
Fuel derivative contracts | Accrued liabilities | $ | 1,258 | $ | (1,258 | ) | $ | — | (a) | $ | 9 | $ | (9 | ) | $ | — | (a) | |||||||||||||||
Fuel derivative contracts | Other noncurrent liabilities | $ | 355 | $ | (355 | ) | $ | — | (a) | $ | — | $ | — | $ | — | (a) | ||||||||||||||||
Interest rate derivative contracts | Other assets | $ | 13 | $ | — | $ | 13 | (a) | $ | 20 | $ | — | $ | 20 | (a) | |||||||||||||||||
(a) The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the Consolidated Balance Sheet in Note 5. | ||||||||||||||||||||||||||||||||
Offsetting of derivative liabilities | ||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||
(i) | (ii) | (iii) =i) + (ii) | (i) | (ii) | (iii) =i) + (ii) | |||||||||||||||||||||||||||
December 31, 2014 | 31-Dec-13 | |||||||||||||||||||||||||||||||
Description | Balance Sheet location | Gross amounts of recognized liabilities | Gross amounts offset in the Balance Sheet | Net amounts of liabilities presented in the Balance Sheet | Gross amounts of recognized liabilities | Gross amounts offset in the Balance Sheet | Net amounts of liabilities presented in the Balance Sheet | |||||||||||||||||||||||||
Fuel derivative contracts | Prepaid expenses and other current assets | $ | — | $ | — | $ | — | $ | 182 | $ | (182 | ) | $ | — | ||||||||||||||||||
Fuel derivative contracts | Other assets | $ | — | $ | — | $ | — | (a) | $ | 100 | $ | (100 | ) | $ | — | (a) | ||||||||||||||||
Fuel derivative contracts | Accrued liabilities | $ | 1,432 | $ | (1,258 | ) | $ | 174 | (a) | $ | 21 | $ | (9 | ) | $ | 12 | (a) | |||||||||||||||
Fuel derivative contracts | Other noncurrent liabilities | $ | 916 | $ | (355 | ) | $ | 561 | (a) | $ | — | $ | — | $ | — | (a) | ||||||||||||||||
Interest rate derivative contracts | Other noncurrent liabilities | $ | 61 | $ | — | $ | 61 | (a) | $ | 77 | $ | (32 | ) | $ | 45 | (a) | ||||||||||||||||
(a) The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the Consolidated Balance Sheet in Note 5. | ||||||||||||||||||||||||||||||||
The following tables present the impact of derivative instruments and their location within the Consolidated Statement of Income for the year ended December 31, 2014 and 2013: | ||||||||||||||||||||||||||||||||
Derivatives in cash flow hedging relationships | ||||||||||||||||||||||||||||||||
(Gain) loss recognized in AOCI on derivatives (effective portion) | (Gain) loss reclassified from AOCI into income (effective portion)(a) | (Gain) loss recognized in income on derivatives (ineffective portion)(b) | ||||||||||||||||||||||||||||||
Year ended | Year ended | Year ended | ||||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
Fuel derivative contracts | $ | 749 | * | $ | 52 | * | $ | 22 | * | $ | 103 | * | $ | 7 | $ | 10 | ||||||||||||||||
Interest rate derivatives | 6 | * | (14 | ) | * | 14 | * | 18 | * | (4 | ) | 1 | ||||||||||||||||||||
Total | $ | 755 | $ | 38 | $ | 36 | $ | 121 | $ | 3 | $ | 11 | ||||||||||||||||||||
*Net of tax | ||||||||||||||||||||||||||||||||
(a) Amounts related to fuel derivative contracts and interest rate derivatives are included in Fuel and oil and Interest expense, respectively. | ||||||||||||||||||||||||||||||||
(b) Amounts are included in Other (gains) losses, net. | ||||||||||||||||||||||||||||||||
Derivatives not in cash flow hedging relationships | ||||||||||||||||||||||||||||||||
(Gain) loss | ||||||||||||||||||||||||||||||||
recognized in income on | ||||||||||||||||||||||||||||||||
derivatives | ||||||||||||||||||||||||||||||||
Year ended | Location of (gain) loss | |||||||||||||||||||||||||||||||
December 31, | recognized in income | |||||||||||||||||||||||||||||||
(in millions) | 2014 | 2013 | on derivatives | |||||||||||||||||||||||||||||
Fuel derivative contracts | $ | 244 | $ | (100 | ) | Other (gains) losses, net | ||||||||||||||||||||||||||
The Company also recorded expense associated with premiums paid for fuel derivative contracts that settled/expired during 2014, 2013, and 2012 of $62 million, $60 million, and $36 million, respectively. These amounts are excluded from the Company’s measurement of effectiveness for related hedges and are included as a component of Other (gains) losses, net, in the Consolidated Statement of Income. | ||||||||||||||||||||||||||||||||
The fair values of the derivative instruments, depending on the type of instrument, were determined by the use of present value methods or option value models with assumptions about commodity prices based on those observed in underlying markets or provided by third parties. Included in the Company’s cumulative net unrealized losses from fuel hedges as of December 31, 2014, recorded in AOCI, were approximately $219 million in unrealized losses, net of taxes, which are expected to be realized in earnings during the twelve months subsequent to December 31, 2014. | ||||||||||||||||||||||||||||||||
Interest rate swaps | ||||||||||||||||||||||||||||||||
The Company is party to certain interest rate swap agreements that are accounted for as either fair value hedges or cash flow hedges, as defined in the applicable accounting guidance for derivative instruments and hedging. Several of the Company's interest rate swap agreements qualify for the “shortcut” method of accounting for hedges, which dictates that the hedges are assumed to be perfectly effective, and, thus, there is no ineffectiveness to be recorded in earnings. For the Company’s interest rate swap agreements that do not qualify for the "shortcut" method of accounting, ineffectiveness is required to be measured at each reporting period. The ineffectiveness associated with all of the Company’s, including AirTran’s, interest rate swap agreements for all periods presented was not material. | ||||||||||||||||||||||||||||||||
The Company has floating-to-fixed interest rate swap agreements associated with its $600 million floating-rate term loan agreement due 2020 and its $332 million term loan agreement due 2019 that are accounted for as cash flow hedges. These interest rate hedges have fixed the interest rate on the $600 million floating-rate term loan agreement at 5.223 percent until maturity, and for the $332 million term loan agreement at 6.315 percent until maturity. | ||||||||||||||||||||||||||||||||
The fair values of the interest rate swap agreements, which are adjusted regularly, have been aggregated by counterparty for classification in the Consolidated Balance Sheet. Agreements totaling an asset of $13 million are fair value hedges and are classified as a component of Other assets. The corresponding adjustment related to the net asset associated with the Company’s fair value hedges is to the carrying value of the long-term debt. Agreements totaling a net liability of $61 million are cash flow hedges and are classified as a component of Other noncurrent liabilities. The corresponding adjustment related to the net liability associated with the Company’s cash flow hedges is to AOCI. See Note 12. | ||||||||||||||||||||||||||||||||
There are also a number of interest rate swap agreements, which convert a portion of AirTran’s floating-rate debt to a fixed-rate basis for the remaining life of the debt, thus reducing the impact of interest rate changes on future interest expense and cash flows. Under these agreements, which expire between 2016 and 2020, it pays fixed rates between 4.35 percent and 6.435 percent and receives either three-month or six-month LIBOR on the notional values. The notional amount of outstanding debt related to interest rate swaps as of December 31, 2014, was $243 million. These interest rate swap arrangements were designated as cash flow hedges as of the acquisition date. The ineffectiveness associated with all of the Company’s interest rate cash flow hedges for all periods presented was not material. | ||||||||||||||||||||||||||||||||
In June 2012, the Company terminated the AirTran floating-to-fixed interest rate swap agreements related to its Floating-rate 737 Aircraft Notes payable through 2020. These swaps were previously designated as cash flow hedges and the gains and/or losses that had previously been deferred in AOCI, which were not material, are being released to expense/income in accordance with the original debt payment schedule. The release of amounts deferred in AOCI related to these interest rate swap agreements was not material during 2014 and is not expected to have a material effect on the Company’s future results of operations. | ||||||||||||||||||||||||||||||||
In December 2012, the Company terminated the fixed-to-floating interest rate swap agreement related to its $100 million 7.375% debentures due 2027. The effect of this termination is such that the interest associated with the debt prospectively reverts back to its original fixed rate. As a result of the approximate $38 million gain realized on this transaction, which will be amortized over the remaining term of the corresponding debentures, and based on projected interest rates at the date of termination, the Company does not believe its future interest expense associated with these debentures will significantly differ from the expense it would have recorded had the debentures remained at floating rates. | ||||||||||||||||||||||||||||||||
During fourth quarter 2014, the Company entered into an interest rate swap agreement related to its $300 million 2.75% Notes due 2019. The primary objective for the Company's use of this interest rate hedge was to reduce the volatility of net interest expense by better matching the repricing of its assets and liabilities. Under this interest rate swap agreement, the Company pays LIBOR plus a margin every six months on the notional amount of the debt, and receives payments based on the fixed stated rate of the notes every six months until the date the notes become due. This interest rate swap agreement qualifies as a fair value hedge, as defined in "Derivatives and Hedging." As a result of the fixed-to-floating interest rate swap agreement in place, the average floating rate recognized during 2014 was approximately 1.23 percent, based on actual and forward rates as of December 31, 2014. | ||||||||||||||||||||||||||||||||
As a result of the fixed-to-floating interest rate swap agreement in place, the average floating rate recognized during 2014 for the Company’s $300 million 5.75% Notes due 2016 was approximately 2.51 percent, based on actual and forward rates as of December 31, 2014. | ||||||||||||||||||||||||||||||||
Credit risk and collateral | ||||||||||||||||||||||||||||||||
Credit exposure related to fuel derivative instruments is represented by the fair value of contracts that are an asset to the Company at the reporting date. At such times, these outstanding instruments expose the Company to credit loss in the event of nonperformance by the counterparties to the agreements. However, the Company has not experienced any significant credit loss as a result of counterparty nonperformance in the past. To manage credit risk, the Company selects and periodically reviews counterparties based on credit ratings, limits its exposure with respect to each counterparty, and monitors the market position of the fuel hedging program and its relative market position with each counterparty. At December 31, 2014, the Company had agreements with all of its active counterparties containing early termination rights and/or bilateral collateral provisions whereby security is required if market risk exposure exceeds a specified threshold amount based on the counterparty credit rating. The Company also had agreements with counterparties in which cash deposits, letters of credit, and/or pledged aircraft are required to be posted whenever the net fair value of derivatives associated with those counterparties exceeds specific thresholds. The following table provides the fair values of fuel derivatives, amounts posted as collateral, and applicable collateral posting threshold amounts as of December 31, 2014, at which such postings are triggered: | ||||||||||||||||||||||||||||||||
Counterparty (CP) | ||||||||||||||||||||||||||||||||
(in millions) | A | B | C | D | E | F | Other(a) | Total | ||||||||||||||||||||||||
Fair value of fuel derivatives | $ | (333 | ) | $ | (136 | ) | $ | (122 | ) | $ | (219 | ) | $ | (66 | ) | $ | (86 | ) | $ | (39 | ) | $ | (1,001 | ) | ||||||||
Cash collateral held (by) CP | (50 | ) | (98 | ) | (57 | ) | — | (23 | ) | (38 | ) | — | (266 | ) | ||||||||||||||||||
Aircraft collateral pledged to CP | (134 | ) | — | — | — | — | — | — | (134 | ) | ||||||||||||||||||||||
Letters of credit (LC) | (100 | ) | — | — | (150 | ) | — | — | — | (250 | ) | |||||||||||||||||||||
Option to substitute LC for aircraft | <(400)(g) | (100) to (500)(d) | N/A | (150) to (550)(d) | N/A | N/A | ||||||||||||||||||||||||||
Option to substitute LC for cash | (50) to (150)(d) | >(500) | (100) to (150)(e) | (75) to (150) or >(550)(d) | N/A | (f) | ||||||||||||||||||||||||||
If credit rating is investment | ||||||||||||||||||||||||||||||||
grade, fair value of fuel | ||||||||||||||||||||||||||||||||
derivative level at which: | ||||||||||||||||||||||||||||||||
Cash is provided to CP | (50) to (200) or >(600) | (50) to (100) or >(500) | >(75) | (75) to (150) or >(550) | >(50) | >(50) | ||||||||||||||||||||||||||
Cash is received from CP | >50 | >150 | >175(c) | >200 | >30 | >(50) | ||||||||||||||||||||||||||
Aircraft or cash can be pledged to | (200) to (600)(d) | (100) to (500)(d) | N/A | (150) to (550)(d) | N/A | N/A | ||||||||||||||||||||||||||
CP as collateral | ||||||||||||||||||||||||||||||||
If credit rating is non-investment | ||||||||||||||||||||||||||||||||
grade, fair value of fuel derivative | ||||||||||||||||||||||||||||||||
level at which: | ||||||||||||||||||||||||||||||||
Cash is provided to CP | (0) to (200) or >(600) | (0) to (100) or >(500) | (b) | (0) to (150) or >(550) | (b) | (b) | ||||||||||||||||||||||||||
Cash is received from CP | (b) | (b) | (b) | (b) | (b) | (b) | ||||||||||||||||||||||||||
Aircraft or cash can be pledged to | (200) to (600) | (100) to (500) | N/A | (150) to (550) | N/A | N/A | ||||||||||||||||||||||||||
CP as collateral | ||||||||||||||||||||||||||||||||
(a) Individual counterparties with fair value of fuel derivatives <$25 million. | ||||||||||||||||||||||||||||||||
(b) Cash collateral is provided at 100 percent of fair value of fuel derivative contracts. | ||||||||||||||||||||||||||||||||
(c) Thresholds may vary based on changes in credit ratings within investment grade. | ||||||||||||||||||||||||||||||||
(d) The Company has the option of providing cash, letters of credit, or pledging aircraft as collateral. | ||||||||||||||||||||||||||||||||
(e) The Company has the option of providing cash or letters of credit as collateral. | ||||||||||||||||||||||||||||||||
(f) The Company has the option to substitute letters of credit for 100 percent of cash collateral requirement. | ||||||||||||||||||||||||||||||||
(g) The Company has the option of providing letters of credit in addition to aircraft collateral if the appraised value of the aircraft does not meet the collateral requirements. |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS | ||||||||||||||||
Accounting standards pertaining to fair value measurements establish a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. | |||||||||||||||||
As of December 31, 2014, the Company held certain items that are required to be measured at fair value on a recurring basis. These included cash equivalents, short-term investments (primarily treasury bills, commercial paper, and certificates of deposit), certain noncurrent investments, interest rate derivative contracts, fuel derivative contracts, and available-for-sale securities. The majority of the Company’s short-term investments consist of instruments classified as Level 1. However, the Company has certificates of deposit, commercial paper, and Eurodollar time deposits that are classified as Level 2, due to the fact that the fair value for these instruments is determined utilizing observable inputs in non-active markets. Noncurrent investments consist of certain auction rate securities, primarily those collateralized by student loan portfolios, which are guaranteed by the U.S. Government. Other available-for-sale securities primarily consist of investments associated with the Company’s excess benefit plan. | |||||||||||||||||
The Company’s fuel and interest rate derivative instruments consist of over-the-counter contracts, which are not traded on a public exchange. Fuel derivative instruments include swaps, as well as different types of option contracts, whereas interest rate derivatives consist solely of swap agreements. See Note 10 for further information on the Company’s derivative instruments and hedging activities. The fair values of swap contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. Therefore, the Company has categorized these swap contracts as Level 2. The Company’s Treasury Department, which reports to the Chief Financial Officer, determines the value of option contracts utilizing an option pricing model based on inputs that are either readily available in public markets, can be derived from information available in publicly quoted markets, or are provided by financial institutions that trade these contracts. The option pricing model used by the Company is an industry standard model for valuing options and is the same model used by the broker/dealer community (i.e., the Company’s counterparties). The inputs to this option pricing model are the option strike price, underlying price, risk free rate of interest, time to expiration, and volatility. Because certain inputs used to determine the fair value of option contracts are unobservable (principally implied volatility), the Company has categorized these option contracts as Level 3. Volatility information is obtained from external sources, but is analyzed by the Company for reasonableness and compared to similar information received from other external sources. The fair value of option contracts considers both the intrinsic value and any remaining time value associated with those derivatives that have not yet settled. The Company also considers counterparty credit risk and its own credit risk in its determination of all estimated fair values. To validate the reasonableness of the Company’s option pricing model, on a monthly basis, the Company compares its option valuations to third party valuations. If any significant differences were to be noted, they would be researched in order to determine the reason. However, historically, no significant differences have been noted. The Company has consistently applied these valuation techniques in all periods presented and believes it has obtained the most accurate information available for the types of derivative contracts it holds. | |||||||||||||||||
Included in Other available-for-sale securities are the Company's investments associated with its excess benefit plan which consist of mutual funds that are publicly traded and for which market prices are readily available. This plan is a non-qualified deferred compensation plan designed to hold Employee contributions in excess of limits established by Section 415 of the Internal Revenue Code of 1986, as amended. Payments under this plan are made based on the participant's distribution election and plan balance. Assets related to the funded portion of the deferred compensation plan are held in a rabbi trust, and the Company remains liable to these participants for the unfunded portion of the plan. The Company records changes in the fair value of the asset in the Company's earnings. | |||||||||||||||||
All of the Company’s auction rate security instruments, totaling $27 million (net) at December 31, 2014, are classified as available-for-sale securities and are reflected at their estimated fair value in the Consolidated Balance Sheet. The Company’s Treasury Department determines the estimated fair values of these securities utilizing a discounted cash flow analysis. The Company has performed, and routinely updates, a valuation for each of its auction rate security instruments, considering, among other items, the collateralization underlying the security investments, the expected future cash flows, including the final maturity, associated with the securities, estimates of the next time the security is expected to have a successful auction or return to full par value, forecasted reset rates based on LIBOR or the issuer’s net loan rate, and a counterparty credit spread. To validate the reasonableness of the Company’s discounted cash flow analyses, the Company compares its valuations to third party valuations on a quarterly basis. | |||||||||||||||||
The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2014, and December 31, 2013: | |||||||||||||||||
Fair value measurements at reporting date using: | |||||||||||||||||
Quoted prices in | Significant | Significant | |||||||||||||||
active markets | other observable | unobservable | |||||||||||||||
for identical assets | inputs | inputs | |||||||||||||||
Description | December 31, 2014 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets | (in millions) | ||||||||||||||||
Cash equivalents | |||||||||||||||||
Cash equivalents (a) | $ | 1,110 | $ | 1,110 | $ | — | $ | — | |||||||||
Commercial paper | 70 | — | 70 | — | |||||||||||||
Certificates of deposit | 4 | — | 4 | — | |||||||||||||
Eurodollar Time Deposits | 98 | — | 98 | — | |||||||||||||
Short-term investments: | |||||||||||||||||
Treasury bills | 1,450 | 1,450 | — | — | |||||||||||||
Certificates of deposit | 256 | — | 256 | — | |||||||||||||
Noncurrent investments (b) | |||||||||||||||||
Auction rate securities | 27 | — | — | 27 | |||||||||||||
Interest rate derivatives (see Note 10) | 13 | — | 13 | — | |||||||||||||
Fuel derivatives: | |||||||||||||||||
Swap contracts (c) | 455 | — | 455 | — | |||||||||||||
Option contracts (c) | 892 | — | — | 892 | |||||||||||||
Other available-for-sale securities | 68 | 63 | — | 5 | |||||||||||||
Total assets | $ | 4,443 | $ | 2,623 | $ | 896 | $ | 924 | |||||||||
Liabilities | |||||||||||||||||
Fuel derivatives: | |||||||||||||||||
Swap contracts (c) | $ | (365 | ) | $ | — | $ | (365 | ) | $ | — | |||||||
Option contracts (c) | (1,983 | ) | — | — | (1,983 | ) | |||||||||||
Interest rate derivatives (see Note 10) | (61 | ) | — | (61 | ) | — | |||||||||||
Total liabilities | $ | (2,409 | ) | $ | — | $ | (426 | ) | $ | (1,983 | ) | ||||||
(a) Cash equivalents are primarily composed of money market investments. | |||||||||||||||||
(b) Noncurrent investments are included in Other assets in the Consolidated Balance Sheet. | |||||||||||||||||
(c) In the Consolidated Balance Sheet amounts are presented as a net liability. See Note 10. | |||||||||||||||||
Fair value measurements at reporting date using: | |||||||||||||||||
Quoted prices in | Significant | Significant | |||||||||||||||
active markets | other observable | unobservable | |||||||||||||||
for identical assets | inputs | inputs | |||||||||||||||
Description | December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets | (in millions) | ||||||||||||||||
Cash equivalents | |||||||||||||||||
Cash equivalents (a) | $ | 992 | $ | 992 | $ | — | $ | — | |||||||||
Commercial paper | 280 | — | 280 | — | |||||||||||||
Certificates of deposit | 23 | — | 23 | — | |||||||||||||
Eurodollar Time Deposits | 60 | — | 60 | — | |||||||||||||
Short-term investments: | |||||||||||||||||
Treasury bills | 1,570 | 1,570 | — | — | |||||||||||||
Certificates of deposit | 227 | — | 227 | — | |||||||||||||
Noncurrent investments (b) | |||||||||||||||||
Auction rate securities | 39 | — | — | 39 | |||||||||||||
Interest rate derivatives (see Note 10) | 20 | — | 20 | — | |||||||||||||
Fuel derivatives: | |||||||||||||||||
Swap contracts (c) | 16 | — | 16 | — | |||||||||||||
Option contracts (c) | 458 | — | — | 458 | |||||||||||||
Option contracts (d) | 9 | — | — | 9 | |||||||||||||
Other available-for-sale securities | 63 | 58 | — | 5 | |||||||||||||
Total assets | $ | 3,757 | $ | 2,620 | $ | 626 | $ | 511 | |||||||||
Liabilities | |||||||||||||||||
Fuel derivatives: | |||||||||||||||||
Swap contracts (c) | $ | (8 | ) | $ | — | $ | (8 | ) | $ | — | |||||||
Option contracts (c) | (274 | ) | — | — | (274 | ) | |||||||||||
Swap contracts (d) | (21 | ) | — | — | (21 | ) | |||||||||||
Interest rate derivatives (see Note 10) | (77 | ) | — | (77 | ) | — | |||||||||||
Total liabilities | $ | (380 | ) | $ | — | $ | (85 | ) | $ | (295 | ) | ||||||
(a) Cash equivalents are primarily composed of money market investments. | |||||||||||||||||
(b) Noncurrent investments are included in Other assets in the Consolidated Balance Sheet. | |||||||||||||||||
(c) In the Consolidated Balance Sheet amounts are presented as a net asset. See Note 10. | |||||||||||||||||
(d) In the Consolidated Balance Sheet amounts are presented as a net liability. See Note 10. | |||||||||||||||||
The Company had no transfers of assets or liabilities between any of the above levels during the years ended December 31, 2014 or 2013. The Company did not have any assets or liabilities measured at fair value on a nonrecurring basis as of December 31, 2014 or 2013. The following tables present the Company’s activity for items measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for 2014 and 2013: | |||||||||||||||||
Fair value measurements using significant | |||||||||||||||||
unobservable inputs (Level 3) | |||||||||||||||||
Fuel | Auction rate | Other | |||||||||||||||
(in millions) | derivatives | securities | securities | Total | |||||||||||||
Balance at December 31, 2013 | $ | 172 | $ | 39 | $ | 5 | $ | 216 | |||||||||
Total gains or (losses) (realized or unrealized) | |||||||||||||||||
Included in earnings | (439 | ) | — | — | (439 | ) | |||||||||||
Included in other comprehensive income | (1,091 | ) | 3 | — | (1,088 | ) | |||||||||||
Purchases | 403 | (a) | — | — | 403 | ||||||||||||
Sales | (155 | ) | (a) | (15 | ) | — | (170 | ) | |||||||||
Settlements | 19 | — | — | 19 | |||||||||||||
Balance at December 31, 2014 | $ | (1,091 | ) | $ | 27 | (b) | $ | 5 | $ | (1,059 | ) | ||||||
The amount of total losses for the period | $ | (450 | ) | $ | — | $ | — | $ | (450 | ) | |||||||
included in earnings attributable to the | |||||||||||||||||
change in unrealized gains or losses relating | |||||||||||||||||
to assets still held at December 31, 2014 | |||||||||||||||||
(a) The purchase and sale of fuel derivatives are recorded gross based on the structure of the derivative instrument and | |||||||||||||||||
whether a contract with multiple derivatives is purchased as a single instrument or separate instruments. | |||||||||||||||||
(b) Included in Other assets in the Consolidated Balance Sheet. | |||||||||||||||||
Fair value measurements using significant | |||||||||||||||||
unobservable inputs (Level 3) | |||||||||||||||||
Fuel | Auction rate | Other | |||||||||||||||
(in millions) | derivatives | securities | securities | Total | |||||||||||||
Balance at December 31, 2012 | $ | 219 | $ | 36 | $ | 5 | $ | 260 | |||||||||
Total gains or (losses) (realized or unrealized) | |||||||||||||||||
Included in earnings | 71 | — | — | 71 | |||||||||||||
Included in other comprehensive income | (107 | ) | 3 | — | (104 | ) | |||||||||||
Purchases | 357 | (a) | — | — | 357 | ||||||||||||
Sales | (417 | ) | (a) | — | — | (417 | ) | ||||||||||
Settlements | 49 | — | — | 49 | |||||||||||||
Balance at December 31, 2013 | $ | 172 | $ | 39 | (b) | $ | 5 | $ | 216 | ||||||||
The amount of total gains for the period | $ | 86 | $ | — | $ | — | $ | 86 | |||||||||
included in earnings attributable to the | |||||||||||||||||
change in unrealized gains or losses relating | |||||||||||||||||
to assets still held at December 31, 2013 | |||||||||||||||||
(a) The purchase and sale of fuel derivatives are recorded gross based on the structure of the derivative instrument and | |||||||||||||||||
whether a contract with multiple derivatives is purchased as a single instrument or separate instruments. | |||||||||||||||||
(b) Included in Other assets in the Consolidated Balance Sheet. | |||||||||||||||||
The significant unobservable input used in the fair value measurement of the Company’s derivative option contracts is implied volatility. Holding other inputs constant, a significant increase (decrease) in implied volatility would result in a significantly higher (lower) fair value measurement, respectively, for the Company’s derivative option contracts. The significant unobservable inputs used in the fair value measurement of the Company’s auction rate securities are time to principal recovery, an illiquidity premium, and counterparty credit spread. Holding other inputs constant, a significant increase (decrease) in such unobservable inputs would result in a significantly lower (higher) fair value measurement, respectively. | |||||||||||||||||
The following table presents a range of the unobservable inputs utilized in the fair value measurements of the Company’s assets and liabilities classified as Level 3 at December 31, 2014: | |||||||||||||||||
Quantitative information about Level 3 fair value measurements | |||||||||||||||||
Valuation technique | Unobservable input | Period (by year) | Range | ||||||||||||||
Fuel derivatives | Option model | Implied volatility | 2015 | 23-47% | |||||||||||||
2016 | 24-36% | ||||||||||||||||
2017 | 19-30% | ||||||||||||||||
2018 | 25-27% | ||||||||||||||||
Auction rate securities | Discounted cash flow | Time to principal recovery | 8 years | ||||||||||||||
Illiquidity premium | 3% | ||||||||||||||||
Counterparty credit spread | 1-2% | ||||||||||||||||
The carrying amounts and estimated fair values of the Company’s long-term debt (including current maturities), as well as the applicable fair value hierarchy tier, at December 31, 2014, are presented in the table below. The fair values of the Company’s publicly held long-term debt are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets; therefore, the Company has categorized these agreements as Level 2. Six of the Company’s debt agreements are not publicly held. The Company has determined the estimated fair value of this debt to be Level 3, as certain inputs used to determine the fair value of these agreements are unobservable. The Company utilizes indicative pricing from counterparties and a discounted cash flow method to estimate the fair value of the Level 3 items. | |||||||||||||||||
(in millions) | Carrying value | Estimated fair value | Fair value level hierarchy | ||||||||||||||
5.75% Notes due 2016 | 313 | 335 | Level 2 | ||||||||||||||
5.25% Convertible Senior Notes due 2016 | 113 | 318 | Level 2 | ||||||||||||||
5.125% Notes due 2017 | 316 | 338 | Level 2 | ||||||||||||||
French Credit Agreements due 2018 - 1.06% | 36 | 36 | Level 3 | ||||||||||||||
Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02% | 24 | 25 | Level 3 | ||||||||||||||
2.75% Notes due 2019 | 300 | 304 | Level 2 | ||||||||||||||
Term Loan Agreement due 2019 - 6.315% | 178 | 178 | Level 3 | ||||||||||||||
Term Loan Agreement due 2019 - 6.84% | 73 | 79 | Level 3 | ||||||||||||||
Term Loan Agreement due 2020 - 5.223% | 372 | 367 | Level 3 | ||||||||||||||
Floating-rate 737 Aircraft Notes payable through 2020 | 300 | 293 | Level 3 | ||||||||||||||
Pass Through Certificates due 2022 - 6.24% | 355 | 410 | Level 2 | ||||||||||||||
7.375% Debentures due 2027 | 134 | 160 | Level 2 | ||||||||||||||
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||||||||
Comprehensive income includes changes in the fair value of certain financial derivative instruments that qualify for hedge accounting, unrealized gains and losses on certain investments, and actuarial gains/losses arising from the Company’s postretirement benefit obligation. A rollforward of the amounts included in AOCI, net of taxes, is shown below for 2014 and 2013: | ||||||||||||||||||||||||
(in millions) | Fuel derivatives | Interest rate derivatives | Defined benefit plan items | Other | Deferred tax impact | Accumulated other | ||||||||||||||||||
comprehensive income (loss) | ||||||||||||||||||||||||
Balance at December 31, 2012 | $ | (103 | ) | $ | (108 | ) | $ | 26 | $ | (8 | ) | $ | 74 | $ | (119 | ) | ||||||||
changes in fair value | (82 | ) | 22 | 39 | 16 | — | (5 | ) | ||||||||||||||||
Reclassification to earnings | 165 | 28 | — | — | -72 | 121 | ||||||||||||||||||
Balance at December 31, 2013 | $ | (20 | ) | $ | (58 | ) | $ | 65 | $ | 8 | $ | 2 | $ | (3 | ) | |||||||||
changes in fair value | (1,191 | ) | (10 | ) | (24 | ) | — | 454 | (771 | ) | ||||||||||||||
Reclassification to earnings | 34 | 23 | — | — | -21 | 36 | ||||||||||||||||||
Balance at December 31, 2014 | $ | (1,177 | ) | $ | (45 | ) | $ | 41 | $ | 8 | $ | 435 | $ | (738 | ) | |||||||||
The following table illustrates the significant amounts reclassified out of each component of AOCI for the year ended December 31, 2014: | ||||||||||||||||||||||||
Year ended December 31, 2014 | ||||||||||||||||||||||||
(in millions) | Amounts reclassified from AOCI | Affected line item in the Consolidated Statement of Comprehensive Income | ||||||||||||||||||||||
AOCI components | ||||||||||||||||||||||||
Unrealized gain on fuel derivative instruments | $ | 34 | Fuel and oil expense | |||||||||||||||||||||
12 | Less: Tax expense | |||||||||||||||||||||||
$ | 22 | Net of tax | ||||||||||||||||||||||
Unrealized gain on interest rate derivative instruments | $ | 23 | Interest expense | |||||||||||||||||||||
9 | Less: Tax expense | |||||||||||||||||||||||
$ | 14 | Net of tax | ||||||||||||||||||||||
Total reclassifications for the period | $ | 36 | Net of tax | |||||||||||||||||||||
EMPLOYEE_RETIREMENT_PLANS
EMPLOYEE RETIREMENT PLANS | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||
EMPLOYEE RETIREMENT PLANS | EMPLOYEE RETIREMENT PLANS | ||||||||||||
Defined contribution plans | |||||||||||||
Southwest has defined contribution plans covering substantially all of its Employees. Contributions under all defined contribution plans are primarily based on Employee compensation and performance of the Company. The Company sponsors Employee savings plans under section 401(k) of the Internal Revenue Code, which include Company matching contributions. In addition, the Southwest Airlines Co. ProfitSharing Plan (ProfitSharing Plan) is a defined contribution plan to which the Company may contribute a percentage of its eligible pre-tax profits, as defined, on an annual basis. No Employee contributions to the ProfitSharing Plan are allowed. AirTran Employees became eligible to participate in Southwest’s ProfitSharing Plan beginning January 1, 2012. | |||||||||||||
Company contributions to all defined contribution plans expensed in 2014, 2013, and 2012, reflected as a component of Salaries, wages, and benefits, were $644 million, $497 million, and $370 million, respectively. | |||||||||||||
Postretirement benefit plans | |||||||||||||
The Company provides postretirement benefits to qualified retirees in the form of medical and dental coverage. Employees must meet minimum levels of service and age requirements as set forth by the Company, or as specified in collective bargaining agreements with specific workgroups. Employees meeting these requirements, as defined, may use accrued unused sick time to pay for medical and dental premiums from the age of retirement until age 65. | |||||||||||||
The following table shows the change in the accumulated postretirement benefit obligation (APBO) for the years ended December 31, 2014 and 2013: | |||||||||||||
(in millions) | 2014 | 2013 | |||||||||||
APBO at beginning of period | $ | 138 | $ | 148 | |||||||||
Service cost | 10 | 30 | |||||||||||
Interest cost | 7 | 4 | |||||||||||
Benefits paid | (4 | ) | (3 | ) | |||||||||
Actuarial (gain)/loss | 21 | (41 | ) | ||||||||||
Settlements | $ | (3 | ) | $ | — | ||||||||
APBO at end of period | $ | 169 | $ | 138 | |||||||||
All plans are unfunded, and benefits are paid as they become due. Estimated future benefit payments expected to be paid are $5 million in 2015, $6 million in 2016, $7 million in 2017, $7 million in 2018, $8 million in 2019, and $55 million for the next five years thereafter. | |||||||||||||
The funded status (the difference between the fair value of plan assets and the projected benefit obligations) of the Company’s consolidated benefit plans are recognized in the Consolidated Balance Sheet, with a corresponding adjustment to AOCI. The following table reconciles the funded status of the plans to the accrued postretirement benefit cost recognized in Other non-current liabilities on the Company’s Consolidated Balance Sheet at December 31, 2014 and 2013. | |||||||||||||
(in millions) | 2014 | 2013 | |||||||||||
Funded status | $ | (169 | ) | $ | (138 | ) | |||||||
Unrecognized net actuarial gain | (53 | ) | (80 | ) | |||||||||
Unrecognized prior service cost | 12 | 15 | |||||||||||
Accumulated other comprehensive income | 41 | 65 | |||||||||||
Cost recognized on Consolidated Balance Sheet | $ | (169 | ) | $ | (138 | ) | |||||||
The consolidated periodic postretirement benefit cost for the years ended December 31, 2014, 2013, and 2012, included the following: | |||||||||||||
(in millions) | 2014 | 2013 | 2012 | ||||||||||
Service cost | $ | 10 | $ | 30 | $ | 20 | |||||||
Interest cost | 7 | 4 | 4 | ||||||||||
Amortization of prior service cost | 3 | 3 | — | ||||||||||
Recognized actuarial gain | (4 | ) | (4 | ) | (5 | ) | |||||||
Settlements | $ | (1 | ) | $ | — | $ | — | ||||||
Net periodic postretirement benefit cost | $ | 15 | $ | 33 | $ | 19 | |||||||
Unrecognized prior service cost is expensed using a straight-line amortization of the cost over the average future service of Employees expected to receive benefits under the plans. Actuarial gains are amortized utilizing the minimum amortization method. The following actuarial assumptions were used to account for the Company’s postretirement benefit plans at December 31, 2014, 2013, and 2012: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Weighted-average discount rate | 4.1 | % | 5.05 | % | 2.9 | % | |||||||
Assumed healthcare cost trend rate (1) | 6.88 | % | 7.5 | % | 8 | % | |||||||
-1 | The assumed healthcare cost trend rate is assumed to remain at 6.88% for 2015, then decline gradually to 5.00% by 2025 and remain level thereafter. | ||||||||||||
The assumed healthcare cost trend rates have a significant effect on the amounts reported for the consolidated postretirement plans. A one percent change in all healthcare cost trend rates used in measuring the APBO at December 31, 2014, would have the following effects: | |||||||||||||
(in millions) | 1% increase | 1% decrease | |||||||||||
Increase (decrease) in total service and interest costs | $ | 3 | $ | (2 | ) | ||||||||
Increase (decrease) in the APBO | $ | 24 | $ | (20 | ) | ||||||||
The selection of a discount rate is made annually and is selected by the Company based upon comparison of the expected future cash flows associated with the Company’s future payments under its consolidated postretirement obligations to a yield curve created using high quality bonds that closely match those expected future cash flows. This rate decreased during 2014 due to market conditions. The assumed healthcare trend rate is also reviewed at least annually and is determined based upon both historical experience with the Company’s healthcare benefits paid and expectations of how those trends may or may not change in future years. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
INCOME TAXES | INCOME TAXES | ||||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of deferred tax assets and liabilities at December 31, 2014 and 2013, are as follows: | |||||||||||||
(in millions) | 2014 | 2013 | |||||||||||
DEFERRED TAX LIABILITIES: | |||||||||||||
Accelerated depreciation | $ | 4,277 | $ | 4,069 | |||||||||
Fuel derivative instruments | — | 36 | |||||||||||
Other | 51 | 84 | |||||||||||
Total deferred tax liabilities | 4,328 | 4,189 | |||||||||||
DEFERRED TAX ASSETS: | |||||||||||||
Fuel derivative instruments | 521 | 8 | |||||||||||
Deferred gains from sale and leaseback of aircraft | 20 | 24 | |||||||||||
Capital and operating leases | 125 | 163 | |||||||||||
Construction obligation | 209 | 168 | |||||||||||
Accrued engine maintenance | 83 | 90 | |||||||||||
Accrued employee benefits | 334 | 307 | |||||||||||
State taxes | 65 | 74 | |||||||||||
Business partner income | 90 | 457 | |||||||||||
Net operating losses and credit carryforwards | 3 | 14 | |||||||||||
Other | 96 | 118 | |||||||||||
Total deferred tax assets | 1,546 | 1,423 | |||||||||||
Net deferred tax liability | $ | 2,782 | $ | 2,766 | |||||||||
The provision for income taxes is composed of the following: | |||||||||||||
(in millions) | 2014 | 2013 | 2012 | ||||||||||
CURRENT: | |||||||||||||
Federal | $ | 203 | $ | 355 | $ | (45 | ) | ||||||
State | 29 | 44 | 12 | ||||||||||
Total current | 232 | 399 | (33 | ) | |||||||||
DEFERRED: | |||||||||||||
Federal | 421 | 62 | 287 | ||||||||||
State | 27 | (6 | ) | 10 | |||||||||
Total deferred | 448 | 56 | 297 | ||||||||||
$ | 680 | $ | 455 | $ | 264 | ||||||||
The effective tax rate on income before income taxes differed from the federal income tax statutory rate for the following reasons: | |||||||||||||
(in millions) | 2014 | 2013 | 2012 | ||||||||||
Tax at statutory U.S. tax rates | $ | 636 | $ | 423 | $ | 240 | |||||||
Nondeductible items | 9 | 10 | 10 | ||||||||||
State income taxes, net of federal benefit | 37 | 25 | 14 | ||||||||||
Other, net | (2 | ) | (3 | ) | — | ||||||||
Total income tax provision | $ | 680 | $ | 455 | $ | 264 | |||||||
During 2014, the Company continued to maintain and did not adjust, a $5 million liability for unrecognized tax benefits, the majority of which related to AirTran’s tax positions in prior years. | |||||||||||||
The only periods subject to examination for the Company’s federal tax return are the 2013 and 2014 tax years. |
QUARTERLY_FINANCIAL_DATA
QUARTERLY FINANCIAL DATA | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Quarterly Financial Data [Abstract] | ||||||||||||||||||
QUARTERLY FINANCIAL DATA | QUARTERLY FINANCIAL DATA | |||||||||||||||||
(unaudited) | ||||||||||||||||||
Three months ended | ||||||||||||||||||
(in millions except per share amounts) | March 31 | June 30 | Sept. 30 | Dec. 31 | ||||||||||||||
2014 | ||||||||||||||||||
Operating revenues | $ | 4,166 | $ | 5,011 | $ | 4,800 | $ | 4,628 | (a) | |||||||||
Operating income | 215 | 775 | 614 | 621 | ||||||||||||||
Income before income taxes | 244 | 746 | 525 | 302 | ||||||||||||||
Net income | 152 | 465 | 329 | 190 | ||||||||||||||
Net income per share, basic | 0.22 | 0.67 | 0.48 | 0.28 | (a) | |||||||||||||
Net income per share, diluted | 0.22 | 0.67 | 0.48 | 0.28 | (a) | |||||||||||||
31-Mar | 30-Jun | Sept. 30 | Dec. 31 | |||||||||||||||
2013 | ||||||||||||||||||
Operating revenues | $ | 4,084 | $ | 4,643 | $ | 4,545 | $ | 4,428 | ||||||||||
Operating income | 70 | 433 | 390 | 386 | ||||||||||||||
Income (loss) before income taxes | 94 | 363 | 419 | 334 | ||||||||||||||
Net income (loss) | 59 | 224 | 259 | 212 | ||||||||||||||
Net income (loss) per share, basic | 0.08 | 0.31 | 0.37 | 0.3 | ||||||||||||||
Net income (loss) per share, diluted | 0.08 | 0.31 | 0.37 | 0.3 | ||||||||||||||
(a) Includes a change in estimate, recorded on a prospective basis, effective October 1, 2014, which increased Passenger revenues by approximately $55 million and increased both Basic and Diluted net income per share by $.04. See Note 1 for further detail. |
Recovered_Sheet1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||
Basis of Presentation | Basis of Presentation | |||||||||||||||||
Southwest Airlines Co. (the “Company”) operates Southwest Airlines, a major domestic airline. The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, which include AirTran Holdings, LLC. On May 2, 2011 (the “acquisition date”), the Company acquired all of the outstanding equity of AirTran Holdings, Inc. (“AirTran Holdings”), the former parent company of AirTran Airways, Inc. (“AirTran Airways”). Throughout these Notes, the Company makes reference to AirTran, which is meant to be inclusive of the following: (i) for periods prior to the acquisition date, AirTran Holdings and its subsidiaries, including, among others, AirTran Airways; and (ii) for periods on and after the acquisition date, AirTran Holdings, LLC, the successor to AirTran Holdings, and its subsidiaries, including among others, AirTran Airways. The accompanying Consolidated Financial Statements include the results of operations and cash flows for all periods presented and all significant inter-entity balances and transactions have been eliminated. The preparation of financial statements in conformity with generally accepted accounting principles in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. | ||||||||||||||||||
Certain prior period amounts have been reclassified to conform to the current presentation. In the Consolidated Statement of Cash Flows for the year ended December 31, 2013, the Company has reclassified $14 million from Capital expenditures to Assets constructed for others. See Note 4 for further information. | ||||||||||||||||||
Cash and cash equivalents | Cash and cash equivalents | |||||||||||||||||
Cash in excess of that necessary for operating requirements is invested in short-term, highly liquid, income-producing investments. Investments with original maturities of three months or less when purchased are classified as cash and cash equivalents, which primarily consist of certificates of deposit, money market funds, and investment grade commercial paper issued by major corporations and financial institutions. Cash and cash equivalents are stated at cost, which approximates fair value. | ||||||||||||||||||
As of December 31, 2014, $266 million in cash collateral deposits were provided by the Company to its fuel hedge counterparties and no cash collateral deposits were held by or provided by the Company to its interest rate hedge counterparties. As of December 31, 2013, the Company had no cash collateral deposits held by or provided by the Company to its fuel hedge counterparties and the Company had provided cash collateral deposits totaling $32 million to its interest rate hedge counterparties. Cash collateral amounts provided or held associated with fuel and interest rate derivative instruments are not restricted in any way and earn interest income at an agreed upon rate that approximates the rates earned on short-term securities issued by the U.S. Government. Depending on the fair value of the Company’s fuel and interest rate derivative instruments, the amounts of collateral deposits held or provided at any point in time can fluctuate significantly. See Note 10 for further information on these collateral deposits and fuel derivative instruments. | ||||||||||||||||||
Short-term and noncurrent investments | Short-term and noncurrent investments | |||||||||||||||||
Short-term investments consist of investments with original maturities of greater than three months but less than twelve months when purchased. These are primarily short-term securities issued by the U.S. Government and certificates of deposit issued by domestic banks. All of these investments are classified as available-for-sale securities and are stated at fair value, which approximates cost. For all short-term investments, at each reset period or upon reinvestment, the Company accounts for the transaction as Proceeds from sales of short-term investments for the security relinquished, and Purchases of short-investments for the security purchased, in the accompanying Consolidated Statement of Cash Flows. Unrealized gains and losses, net of tax, if any, are recognized in Accumulated other comprehensive income (loss) (“AOCI”) in the accompanying Consolidated Balance Sheet. Realized net gains and losses on specific investments, if any, are reflected in Interest income in the accompanying Consolidated Statement of Income. Both unrealized and realized gains and/or losses associated with investments were immaterial for all years presented. | ||||||||||||||||||
Noncurrent investments consist of investments with maturities of greater than twelve months. At December 31, 2014, these primarily consisted of the Company’s auction rate security instruments that it expects will not be redeemed during 2015. See Note 11 for further information. Noncurrent investments are included as a component of Other assets in the Consolidated Balance Sheet. | ||||||||||||||||||
Accounts and other receivables | Accounts and other receivables | |||||||||||||||||
Accounts and other receivables are carried at cost. They primarily consist of amounts due from credit card companies associated with sales of tickets for future travel, amounts due from business partners in the Company’s frequent flyer program, and amounts due from counterparties associated with fuel derivative instruments that have settled. The allowance for doubtful accounts was immaterial at December 31, 2014 and 2013. In addition, the provision for doubtful accounts and write-offs for 2014 and 2013 were each immaterial. | ||||||||||||||||||
Inventories | Inventories | |||||||||||||||||
Inventories consist primarily of aircraft fuel, flight equipment expendable parts, materials, and supplies. All of these items are carried at average cost, less an allowance for obsolescence. These items are generally charged to expense when issued for use. The reserve for obsolescence was $46 million and $36 million at December 31, 2014, and 2013, respectively. In addition, the Company’s provision for obsolescence and write-offs for 2014, 2013, and 2012 were each immaterial. | ||||||||||||||||||
Property and equipment | Property and equipment | |||||||||||||||||
Property and equipment is stated at cost. Capital expenditures includes payments made for aircraft, other flight equipment, purchase deposits related to future aircraft deliveries, and ground and other property and equipment. Depreciation is provided by the straight-line method to estimated residual values over periods generally ranging from 23 to 25 years for flight equipment and 5 to 30 years for ground property and equipment once the asset is placed in service. Residual values estimated for aircraft generally range from 2 to 20 percent and for ground property and equipment generally range from 0 to 10 percent. Property under capital leases and related obligations are initially recorded at an amount equal to the present value of future minimum lease payments computed on the basis of the Company’s incremental borrowing rate or, when known, the interest rate implicit in the lease. Amortization of property under capital leases is on a straight-line basis over the lease term and is included in Depreciation and amortization expense. Leasehold improvements generally are amortized on a straight-line basis over the shorter of the estimated useful life of the improvement or the remaining term of the lease. Assets constructed for others primarily consists of airport improvement projects, once placed into service, in which the Company is considered the accounting owner of the facilities, and such assets are amortized to estimated residual value over the term of the Company's lease or the expected life of the asset. See Note 4 for further information. | ||||||||||||||||||
The Company evaluates its long-lived assets used in operations for impairment when events and circumstances indicate that the undiscounted cash flows to be generated by that asset are less than the carrying amounts of the asset and may not be recoverable. Factors that would indicate potential impairment include, but are not limited to, significant decreases in the market value of the long-lived asset(s), a significant change in the long-lived asset’s physical condition, and operating or cash flow losses associated with the use of the long-lived asset. If an asset is deemed to be impaired, an impairment loss is recorded for the excess of the asset book value in relation to its estimated fair value. | ||||||||||||||||||
During first quarter 2012 the Company changed the estimated retirement dates of several 737-300 and 737-500 aircraft based on revisions in the Company’s fleet plan. This change, which was accounted for on a prospective basis, resulted in an acceleration of depreciation expense, since the majority of these aircraft had previously been expected to retire in periods beyond 2012, but were subsequently expected to be retired during 2012. The impact of this change on the year ended December 31, 2012 was an increase to Depreciation expense of $12 million. Excluding the impact of Profitsharing and income taxes, the change resulted a $6 million decrease to Net income and a $0.01 decrease to Basic and Diluted Net income per share for the year ended December 31, 2012. | ||||||||||||||||||
During third quarter 2012 the Company changed the estimated residual values of its entire fleet of owned 737-300 and 737-500 aircraft. This change was based on an agreement entered into during July 2012, pursuant to which the Company will lease or sublease certain aircraft to Delta Air Lines, Inc., and the resulting impact this transaction will have on how the Company manages the ultimate retirement of its owned 737-300 and 737-500 aircraft. See Note 7 for further information on the lease/sublease transaction. Based on the expected retirement dates and then current and expected future market conditions related to its owned 737-300 and 737-500 aircraft, the Company reduced the residual values of these aircraft from approximately ten percent of original cost to approximately two percent of original cost. As this reduction in residual value was considered a change in estimate, it was accounted for on a prospective basis, and thus the Company will record additional depreciation expense over the remainder of the useful lives for each aircraft. The impact of this change on the year ended December 31, 2012 was an increase to Depreciation expense of $34 million. Excluding the impact of Profitsharing and income taxes, the change resulted an $18 million decrease to Net income and a $0.02 decrease to Basic and Diluted Net income per share for the year ended December 31, 2012. | ||||||||||||||||||
Aircraft and engine maintenance | Aircraft and engine maintenance | |||||||||||||||||
The cost of scheduled inspections and repairs and routine maintenance costs for all aircraft and engines are charged to Maintenance materials and repairs expense as incurred. The Company also has “power-by-the-hour” agreements related to certain of its aircraft engines with external service providers. Under these agreements, which the Company has determined effectively transfers the risk and creates an obligation associated with the maintenance on such engines to the counterparty, expense is recorded commensurate with each hour flown on an engine. In situations where the payments to the counterparty do not sufficiently match the level of services received during the period, expense is recorded on a straight-line basis over the term of the agreement based on our best estimate of expected future aircraft utilization. For its engine maintenance contracts that do not transfer risk to the service provider, the Company records expense on a time and materials basis when an engine repair event takes place. Modifications that significantly enhance the operating performance or extend the useful lives of aircraft or engines are capitalized and amortized over the remaining life of the asset. | ||||||||||||||||||
Goodwill and intangible assets | Goodwill and intangible assets | |||||||||||||||||
The Company applies a fair value based impairment test to the carrying value of goodwill and indefinite-lived intangible assets on an annual basis (as of October 1), or more frequently if certain events or circumstances indicate that an impairment loss may have been incurred. The FASB standard “Testing Indefinite-Lived Intangible Assets for Impairment” gives companies the option to perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired rather than calculating the fair value of the indefinite-lived intangible asset. The Company adopted this standard and has applied the provisions to its annual indefinite-lived intangible asset impairment test for 2014. | ||||||||||||||||||
The Company first utilizes a qualitative approach and analyzes various factors to determine if events and circumstances have affected the fair value of the goodwill and indefinite-lived intangible assets. If the Company determines it is more likely than not that the asset value may be impaired, the Company then uses the quantitative approach to assess the asset’s fair value and amount of impairment. As a result of the Company’s qualitative analyses performed during 2014 the Company concluded it was more likely than not that the fair values of its Goodwill and Indefinite-lived intangible assets was greater than the carrying value and; therefore, a quantitative assessment was not necessary. | ||||||||||||||||||
Intangible assets primarily consist of acquired leasehold rights to certain airport owned gates at Chicago’s Midway International Airport, take-off and landing slots at certain domestic slot-controlled airports, and certain intangible assets recognized from the AirTran acquisition. The following table is a summary of the Company’s intangible assets, which are included as a component of Other assets in the Company's Consolidated Balance Sheet, as of December 31, 2014 and 2013: | ||||||||||||||||||
Year ended December 31, 2014 | Year ended December 31, 2013 | |||||||||||||||||
(in millions) | Weighted-average useful life (in years) | Gross carrying | Accumulated | Gross carrying amount | Accumulated Amortization | |||||||||||||
amount | amortization | |||||||||||||||||
Customer relationships/marketing agreements | 9 | $ | 38 | $ | 26 | $ | 39 | $ | 23 | |||||||||
Trademarks/trade names | 6 | 36 | 30 | 36 | 25 | |||||||||||||
Owned domestic slots | Indefinite | 303 | n/a | 93 | n/a | |||||||||||||
Leased domestic slots (a) | 39 | 19 | 5 | 19 | 4 | |||||||||||||
Non-compete agreements | 2 | 5 | 5 | 5 | 5 | |||||||||||||
Gate leasehold rights | 19 | 60 | 32 | 60 | 29 | |||||||||||||
Total | 15 | $ | 461 | $ | 98 | $ | 252 | $ | 86 | |||||||||
(a) Useful life of leased slots is based on the stated lease term. | ||||||||||||||||||
During fourth quarter 2013, following the Company’s acquisition of additional slots at New York’s LaGuardia Airport, the Company made the determination that all of its owned domestic slots should be assigned an indefinite life and would thus not be subject to further amortization, including those that are owned but leased to other carriers. In addition, during first quarter 2014, the Company acquired additional slots at Washington’s Ronald Reagan National Airport which were also assigned an indefinite life. Among other factors, the determination that all of the Company's owned domestic slots should be assigned an indefinite life was due to the Company’s reassessment of the current size and importance of its operations at New York’s LaGuardia Airport and Washington’s Ronald Reagan National Airport versus when the Company first began service to these airports in recent years. The impact of this prospective change in accounting estimate is immaterial. | ||||||||||||||||||
The aggregate amortization expense for 2014, 2013, and 2012 was $13 million, $19 million, and $25 million, respectively. Estimated aggregate amortization expense for the five succeeding years and thereafter is as follows: 2015 – $11 million, 2016 – $8 million, 2017 – $5 million, 2018 – $5 million, 2019 – $4 million, and thereafter – $27 million. | ||||||||||||||||||
Revenue recognition | Revenue recognition | |||||||||||||||||
Tickets sold are initially deferred as Air traffic liability. Passenger revenue is recognized when transportation is provided. Air traffic liability primarily represents tickets sold for future travel dates and estimated refunds and exchanges of tickets sold for past travel dates. The majority of the Company’s tickets sold are nonrefundable. Refundable tickets that are sold but not flown on the travel date can be reused for another flight, up to a year from the date of sale, or refunded. A small percentage of tickets (or partial tickets) expire unused. The Company estimates the amount of tickets that expire unused and recognizes such amounts in Passenger revenue using the redemption method based on scheduled flight date. Prior to September 13, 2013, funds associated with tickets in which a passenger did not show up for a flight without canceling were able to be reused on another flight for up to twelve months. On September 13, 2013, Southwest implemented a No Show policy that applies to nonrefundable fares that are not canceled or changed by a Customer at least ten minutes prior to a flight's scheduled departure. Based on the Company's revenue recognition policy, revenue is now recorded at the flight date for a Customer who does not change his/her itinerary and loses his/her funds. Amounts collected from passengers for ancillary services such as baggage and other fees are generally recognized as Other revenue when the service is provided, which is typically the flight date. | ||||||||||||||||||
The Company's policy is to record revenue for the estimated spoilage of tickets (including partial tickets) once the flight date has passed, under the redemption method. Initial spoilage estimates are routinely adjusted and ultimately finalized once the tickets expire, which is typically twelve months after the original purchase date. Spoilage estimates are based on the Customers' historical travel behavior as well as assumptions about the Customers' future travel behavior. Assumptions used to generate spoilage estimates can be impacted by several factors including, but not limited to: fare increases, fare sales, changes to the Company's ticketing policies, changes to the Company’s refund, exchange and unused funds policies, or economic factors. | ||||||||||||||||||
The Company is also required to collect certain taxes and fees from Customers on behalf of government agencies and remit these back to the applicable governmental entity on a periodic basis. These taxes and fees include U.S. federal transportation taxes, federal security charges, and airport passenger facility charges. These items are collected from Customers at the time they purchase their tickets, but are not included in Passenger revenue. The Company records a liability upon collection from the Customer and relieves the liability when payments are remitted to the applicable governmental agency. | ||||||||||||||||||
Frequent flyer program | Frequent flyer program | |||||||||||||||||
The Company records a liability for the estimated incremental cost of providing free travel under its frequent flyer program for all amounts earned from flight activity that are expected to be redeemed for future travel. The estimated incremental cost includes direct passenger costs such as fuel, food, and other operational costs, but does not include any contribution to fixed overhead costs or profit. | ||||||||||||||||||
Southwest also sells frequent flyer points and related services to companies participating in its frequent flyer program. Funds received from the sale of these points are accounted for using the residual method. Under this method, the Company determined the portion of funds received that relate to free travel were currently estimated to be 100 percent of the amount received under the Company's Rapid Reward program as of December 31, 2014. These amounts are deferred and recognized as Passenger revenue when the ultimate free travel awards are flown. For all points sold to business partners that are expected to expire unused, the Company recognizes spoilage in accordance with the redemption method. The Company's consolidated liability associated with the sale of frequent flyer points and/or flight credits, was approximately $1.3 billion and $1.1 billion as of December 31, 2014, and 2013, respectively. This liability is included as part of Air Traffic liability in the Company’s Consolidated Balance Sheet. | ||||||||||||||||||
During fourth quarter 2014, the Company increased the amount of spoilage recorded associated with frequent flyer points sold to business partners as a result of continued monitoring of Member redemption activity and behavior under its Rapid Rewards program. Based on a sufficient amount of historical data and Member attributes observed since the new program was launched in 2011, the Company developed a predictive statistical model to analyze the amount of spoilage expected. In estimating spoilage, the Company takes into account the Member’s past behavior, as well as several factors that are expected to be indicative of the likelihood of future point redemption. These factors include, but are not limited to, tenure with program, points accrued in the program, and whether or not the customer has a co-branded credit card. This change in estimate, which was recorded on a prospective basis, effective October 1, 2014, increased Passenger revenues by approximately $55 million for the quarter and the year ended December 31, 2014. After consideration of profitsharing and taxes, the impact of this change to net income was an increase of $29 million, or $.04 per Basic and Diluted share, for the year ended December 31, 2014. The higher spoilage rate is expected to continue in 2015; however, the precise revenue impact will not be determinable until the actual number of point redemptions for the period is known. | ||||||||||||||||||
Advertising | Advertising | |||||||||||||||||
Advertising costs are charged to expense as incurred. Advertising and promotions expense for the years ended December 31, 2014, 2013, and 2012 was $207 million, $208 million, and $223 million, respectively, and is included as a component of Other operating expense in the accompanying Consolidated Statement of Income. | ||||||||||||||||||
Share-based Employee compensation | Share-based Employee compensation | |||||||||||||||||
The Company has share-based compensation plans covering certain Employees, including plans covering the Company’s Board of Directors. The Company accounts for share-based compensation based on its grant date fair value. See Note 9 for further information. | ||||||||||||||||||
The fair value of RSUs and PBRSUs is based on the closing price of the Company’s common stock on the date of grant. Outstanding RSUs vest over three years, subject generally to the individual’s continued employment or service. The PBRSUs vest on May 14, 2017, subject to the Company’s performance with respect to a three-year simple average of Return on Invested Capital, before taxes and excluding special items ("ROIC"), for the period beginning on January 1, 2014 and ending on December 31, 2016, and the individual’s continued employment or service. The number of PBRSUs vesting on the vesting date will be interpolated based on the average ROIC for the defined performance period, and ranges from zero PBRSUs at an average ROIC of 12 percent or lower to 200 percent of granted PBRSUs at an average ROIC of 20 percent or higher. The Company recognizes all expense on a straight-line basis over the vesting period, with any changes in expense due to the number of PBRSUs expected to vest being modified on a prospective basis. | ||||||||||||||||||
The Company accounts for share-based compensation utilizing fair value. | ||||||||||||||||||
A portion of the Company’s granted options qualify as incentive stock options for income tax purposes. As such, a tax benefit is not recorded at the time the compensation cost related to the options is recorded for book purposes due to the fact that an incentive stock option does not ordinarily result in a tax benefit unless there is a disqualifying disposition. Grants of non-qualified stock options result in the creation of a deferred tax asset, which is a temporary difference, until the time that the option is exercised. Due to the treatment of incentive stock options for tax purposes, the Company’s effective tax rate from year to year is subject to variability. | ||||||||||||||||||
The Black-Scholes option valuation model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of subjective assumptions including expected stock price volatility. The Company estimates expected stock price volatility via observations of both historical volatility trends as well as implied future volatility observations as determined by independent third parties. | ||||||||||||||||||
Fair Value of Financial Instruments | Financial derivative instruments | |||||||||||||||||
The Company accounts for financial derivative instruments at fair value and applies hedge accounting rules where appropriate. The Company utilizes various derivative instruments, including jet fuel, crude oil, unleaded gasoline, and heating oil-based derivatives, to attempt to reduce the risk of its exposure to jet fuel price increases. These instruments consist primarily of purchased call options, collar structures, call spreads, put spreads, and fixed price swap agreements, and upon proper qualification are accounted for as cash-flow hedges. The Company also has interest rate swap agreements to convert a portion of its fixed-rate debt to floating rates and has swap agreements that convert certain floating-rate debt to a fixed-rate. These interest rate hedges are appropriately designated as either fair value hedges or as cash flow hedges. | ||||||||||||||||||
Since the majority of the Company’s financial derivative instruments are not traded on a market exchange, the Company estimates their fair values. Depending on the type of instrument, the values are determined by the use of present value methods or option value models with assumptions about commodity prices based on those observed in underlying markets. Also, since there is not a reliable forward market for jet fuel, the Company must estimate the future prices of jet fuel in order to measure the effectiveness of the hedging instruments in offsetting changes to those prices. Forward jet fuel prices are estimated through utilization of a statistical-based regression equation with data from market forward prices of like commodities. This equation is then adjusted for certain items, such as transportation costs, that are stated in the Company’s fuel purchasing contracts with its vendors. | ||||||||||||||||||
For the effective portion of settled fuel hedges, the Company records the associated gains or losses as a component of Fuel and oil expense in the Consolidated Statement of Income. For amounts representing ineffectiveness, as defined, or changes in fair value of derivative instruments for which hedge accounting is not applied, the Company records any gains or losses as a component of Other (gains) losses, net, in the Consolidated Statement of Income. Amounts that are paid or received in connection with the purchase or sale of financial derivative instruments (i.e., premium costs of option contracts) are classified as a component of Other (gains) losses, net, in the Consolidated Statement of Income in the period in which the instrument settles or expires. All cash flows associated with purchasing and selling derivatives are classified as operating cash flows in the Consolidated Statement of Cash Flows, within Changes in certain assets and liabilities. See Note 10 for further information on hedge accounting and financial derivative instruments. | ||||||||||||||||||
The Company classifies its cash collateral provided to or held from counterparties in a “net” presentation on the Consolidated Balance Sheet against the fair value of the derivative positions with those counterparties. See Note 10 for further information. | ||||||||||||||||||
Accounting standards pertaining to fair value measurements establish a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. | ||||||||||||||||||
As of December 31, 2014, the Company held certain items that are required to be measured at fair value on a recurring basis. These included cash equivalents, short-term investments (primarily treasury bills, commercial paper, and certificates of deposit), certain noncurrent investments, interest rate derivative contracts, fuel derivative contracts, and available-for-sale securities. The majority of the Company’s short-term investments consist of instruments classified as Level 1. However, the Company has certificates of deposit, commercial paper, and Eurodollar time deposits that are classified as Level 2, due to the fact that the fair value for these instruments is determined utilizing observable inputs in non-active markets. Noncurrent investments consist of certain auction rate securities, primarily those collateralized by student loan portfolios, which are guaranteed by the U.S. Government. Other available-for-sale securities primarily consist of investments associated with the Company’s excess benefit plan. | ||||||||||||||||||
The Company’s fuel and interest rate derivative instruments consist of over-the-counter contracts, which are not traded on a public exchange. Fuel derivative instruments include swaps, as well as different types of option contracts, whereas interest rate derivatives consist solely of swap agreements. See Note 10 for further information on the Company’s derivative instruments and hedging activities. The fair values of swap contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. Therefore, the Company has categorized these swap contracts as Level 2. The Company’s Treasury Department, which reports to the Chief Financial Officer, determines the value of option contracts utilizing an option pricing model based on inputs that are either readily available in public markets, can be derived from information available in publicly quoted markets, or are provided by financial institutions that trade these contracts. The option pricing model used by the Company is an industry standard model for valuing options and is the same model used by the broker/dealer community (i.e., the Company’s counterparties). The inputs to this option pricing model are the option strike price, underlying price, risk free rate of interest, time to expiration, and volatility. Because certain inputs used to determine the fair value of option contracts are unobservable (principally implied volatility), the Company has categorized these option contracts as Level 3. Volatility information is obtained from external sources, but is analyzed by the Company for reasonableness and compared to similar information received from other external sources. The fair value of option contracts considers both the intrinsic value and any remaining time value associated with those derivatives that have not yet settled. The Company also considers counterparty credit risk and its own credit risk in its determination of all estimated fair values. To validate the reasonableness of the Company’s option pricing model, on a monthly basis, the Company compares its option valuations to third party valuations. If any significant differences were to be noted, they would be researched in order to determine the reason. However, historically, no significant differences have been noted. The Company has consistently applied these valuation techniques in all periods presented and believes it has obtained the most accurate information available for the types of derivative contracts it holds. | ||||||||||||||||||
Software capitalization | Software capitalization | |||||||||||||||||
The Company capitalizes certain internal and external costs related to the acquisition and development of internal use software during the application development stages of projects. The Company amortizes these costs using the straight-line method over the estimated useful life of the software, which typically ranges from five to fifteen years. Costs incurred during the preliminary project or the post-implementation/operation stages of the project are expensed as incurred. Capitalized computer software, included as a component of Ground property and equipment in the accompanying Consolidated Balance Sheet, net of accumulated depreciation, was $403 million and $357 million at December 31, 2014, and 2013, respectively. Computer software depreciation expense was $122 million, $90 million, and $59 million for the years ended December 31, 2014, 2013, and 2012, respectively, and is included as a component of Depreciation and amortization expense in the accompanying Consolidated Statement of Income. | ||||||||||||||||||
Income taxes | Income taxes | |||||||||||||||||
The Company accounts for deferred income taxes utilizing an asset and liability method, whereby deferred tax assets and liabilities are recognized based on the tax effect of temporary differences between the financial statements and the tax basis of assets and liabilities, as measured by current enacted tax rates. The Company also evaluates the need for a valuation allowance to reduce deferred tax assets to estimated recoverable amounts. | ||||||||||||||||||
The Company’s policy for recording interest and penalties associated with uncertain tax positions is to record such items as a component of income before income taxes. Penalties are recorded in Other (gains) losses, net, and interest paid or received is recorded in Interest expense or Interest income, respectively, in the Consolidated Statement of Income. Amounts recorded for penalties and interest related to uncertain tax positions were immaterial for all years presented. | ||||||||||||||||||
Concentration risk | Concentration risk | |||||||||||||||||
Approximately 83 percent of the Company’s full-time equivalent Employees are unionized and are covered by collective bargaining agreements. The Company manages this risk by maintaining positive relationships with its Employees and its Employees’ Representatives. The majority of the Company's unionized Employees, including its Pilots, Mechanics, Ramp, Operations, Provisioning and Freight Agents, Flight Attendants, Material Specialists, Dispatchers, Flight Crew Training Instructors, Flight Simulator Technicians, and Facilities Maintenance Technicians are in discussions on labor agreements or have labor agreements which will become amendable within one year. These Employee groups represent approximately 70 percent of the Company’s full-time equivalent Employees as of December 31, 2014. | ||||||||||||||||||
The Company attempts to minimize its concentration risk with regards to its cash, cash equivalents, and its investment portfolio. This is accomplished by diversifying and limiting amounts among different counterparties, the type of investment, and the amount invested in any individual security or money market fund. | ||||||||||||||||||
To manage risk associated with financial derivative instruments held, the Company selects and will periodically review counterparties based on credit ratings, limits its exposure to a single counterparty, and monitors the market position of the program and its relative market position with each counterparty. The Company also has agreements with counterparties containing early termination rights and/or bilateral collateral provisions whereby security is required if market risk exposure exceeds a specified threshold amount or credit ratings fall below certain levels. Collateral deposits provided to or held from counterparties serve to decrease, but not totally eliminate, the credit risk associated with the Company’s hedging program. See Note 10 for further information. | ||||||||||||||||||
As of December 31, 2014, the Company operates an all-Boeing fleet, all of which are variations of the Boeing 737. Following the 2011 acquisition of AirTran, the Company also operated a fleet of Boeing 717's, but these aircraft were removed from the Company's operations prior to the end of 2014. See Note 7 for further information. If the Company were unable to acquire additional aircraft or associated aircraft parts from Boeing, or Boeing were unable or unwilling to make timely deliveries of aircraft or to provide adequate support for its products, the Company’s operations would be materially adversely impacted. In addition, the Company would be materially adversely impacted in the event of a mechanical or regulatory issue associated with the Boeing 737 aircraft type, whether as a result of downtime for part or all of the Company’s fleet or because of a negative perception by the flying public. The Company is also dependent on sole suppliers for aircraft engines and certain other aircraft parts and would, therefore, also be materially adversely impacted in the event of the unavailability of, or a mechanical or regulatory issue associated with, engines and other parts. | ||||||||||||||||||
The Company has historically entered into agreements with some of its co-brand, payment, and loyalty partners that contain exclusivity aspects which place certain confidential restrictions on the Company from entering into certain arrangements with other payment and loyalty partners. These arrangements generally extend for the terms of the partnerships, none of which currently extend beyond May 2017. The Company believes the financial benefits generated by the exclusivity aspects of these arrangements outweigh the risks involved with such agreements. | ||||||||||||||||||
Derivatives | The Company is party to certain interest rate swap agreements that are accounted for as either fair value hedges or cash flow hedges, as defined in the applicable accounting guidance for derivative instruments and hedging. Several of the Company's interest rate swap agreements qualify for the “shortcut” method of accounting for hedges, which dictates that the hedges are assumed to be perfectly effective, and, thus, there is no ineffectiveness to be recorded in earnings. For the Company’s interest rate swap agreements that do not qualify for the "shortcut" method of accounting, ineffectiveness is required to be measured at each reporting period | |||||||||||||||||
Upon proper qualification, the Company accounts for its fuel derivative instruments as cash flow hedges. Generally, utilizing hedge accounting, all periodic changes in fair value of the derivatives designated as hedges that are considered to be effective are recorded in Accumulated Other Comprehensive Income (Loss) ("AOCI") until the underlying jet fuel is consumed. See Note 12. The Company’s results are subject to the possibility that periodic changes will not be effective, as defined, or that the derivatives will no longer qualify for hedge accounting. Ineffectiveness results when the change in the fair value of the derivative instrument exceeds the change in the value of the Company’s expected future cash outlay to purchase and consume jet fuel. To the extent that the periodic changes in the fair value of the derivatives are ineffective, the ineffective portion is recorded to Other (gains) losses, net in the Consolidated Statement of Income. Likewise, if a hedge ceases to qualify for hedge accounting, any change in the fair value of derivative instruments since the last reporting period is recorded to Other (gains) losses, net, in the Consolidated Statement of Income in the period of the change; however, any amounts previously recorded to AOCI would remain there until such time as the original forecasted transaction occurs, at which time these amounts would be reclassified to Fuel and oil expense. When the Company has sold derivative positions in order to effectively “close” or offset a derivative already held as part of its fuel derivative instrument portfolio, any subsequent changes in fair value of those positions are marked to market through earnings. Likewise, any changes in fair value of those positions that were offset by entering into the sold positions and were de-designated as hedges, are concurrently marked to market through earnings. However, any changes in value related to hedges that were deferred as part of AOCI while designated as a hedge would remain until the originally forecasted transaction occurs. In a situation where it becomes probable that a fuel hedged forecasted transaction will not occur, any gains and/or losses that have been recorded to AOCI would be required to be immediately reclassified into earnings. The Company did not have any such situations occur during 2012, 2013, or 2014. | ||||||||||||||||||
In some situations, an entire commodity type used in hedging may cease to qualify for special hedge accounting treatment | ||||||||||||||||||
Ineffectiveness is inherent in hedging jet fuel with derivative positions based in other crude oil related commodities. Due to the volatility in markets for crude oil and related products, the Company is unable to predict the amount of ineffectiveness each period, including the loss of hedge accounting, which could be determined on a derivative by derivative basis or in the aggregate for a specific commodity. This may result, and has resulted, in increased volatility in the Company’s financial results. Factors that have and may continue to lead to ineffectiveness and unrealized gains and losses on derivative contracts include: significant fluctuation in energy prices, the number of derivative positions the Company holds, significant weather events affecting refinery capacity and the production of refined products, and the volatility of the different types of products the Company uses in hedging. However, even though derivatives may not qualify for hedge accounting, the Company continues to hold the instruments as management believes derivative instruments continue to afford the Company the opportunity to stabilize jet fuel costs. | ||||||||||||||||||
Accounting pronouncements pertaining to derivative instruments and hedging are complex with stringent requirements, including the documentation of a Company hedging strategy, statistical analysis to qualify a commodity for hedge accounting both on a historical and a prospective basis, and strict contemporaneous documentation that is required at the time each hedge is designated by the Company. The Company also examines the effectiveness of each individual hedge and its entire hedging program on a quarterly basis utilizing statistical analysis. This analysis involves utilizing regression and other statistical analyses that compare changes in the price of jet fuel to changes in the prices of the commodities used for hedging purposes | ||||||||||||||||||
All of the Company's fuel derivative instruments and interest rate swaps are subject to agreements that follow the netting guidance in the applicable accounting for derivatives and hedging. The types of derivative instruments the Company has determined are subject to netting requirements in the accompanying Consolidated Balance Sheet are those in which the Company pays or receives cash for transactions with the same counterparty and in the same currency via one net payment or receipt. For cash collateral held by the Company or provided to counterparties, the Company nets such amounts against the fair value of the Company's derivative portfolio by each counterparty. The Company has elected to utilize netting for both its fuel derivative instruments and interest rate swap agreements and also classifies such amounts as either current or noncurrent, based on the net fair value position with each of the Company's counterparties in the Consolidated Balance Sheet. | ||||||||||||||||||
The Company's application of its netting policy associated with cash collateral differs depending on whether its derivative instruments are in a net asset position or a net liability position. If its fuel derivative instruments are in a net asset position with a counterparty, cash collateral amounts held are first netted against current outstanding derivative amounts associated with that counterparty until that balance is zero, and then any remainder is applied against the fair value of noncurrent outstanding derivative instruments. If the Company's fuel derivative instruments are in a net liability position with the counterparty, cash collateral amounts provided are first netted against noncurrent outstanding derivative amounts associated with that counterparty until that balance is zero, and then any remainder is applied against the fair value of current outstanding derivative instruments | ||||||||||||||||||
Compensation Related Costs | A portion of the Company’s granted options qualify as incentive stock options for income tax purposes. As such, a tax benefit is not recorded at the time the compensation cost related to the options is recorded for book purposes due to the fact that an incentive stock option does not ordinarily result in a tax benefit unless there is a disqualifying disposition. Grants of non-qualified stock options result in the creation of a deferred tax asset, which is a temporary difference, until the time that the option is exercised. Due to the treatment of incentive stock options for tax purposes, the Company’s effective tax rate from year to year is subject to variability. | |||||||||||||||||
Employee Retirement Plans | Unrecognized prior service cost is expensed using a straight-line amortization of the cost over the average future service of Employees expected to receive benefits under the plans. Actuarial gains are amortized utilizing the minimum amortization method. The following actuarial assumptions were used to account for the Company’s postretirement benefit plans at December 31, 2014, 2013, and 2012: | |||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||
Weighted-average discount rate | 4.1 | % | 5.05 | % | 2.9 | % | ||||||||||||
Assumed healthcare cost trend rate (1) | 6.88 | % | 7.5 | % | 8 | % | ||||||||||||
-1 | The assumed healthcare cost trend rate is assumed to remain at 6.88% for 2015, then decline gradually to 5.00% by 2025 and remain level thereafter. | |||||||||||||||||
The assumed healthcare cost trend rates have a significant effect on the amounts reported for the consolidated postretirement plans. A one percent change in all healthcare cost trend rates used in measuring the APBO at December 31, 2014, would have the following effects: | ||||||||||||||||||
(in millions) | 1% increase | 1% decrease | ||||||||||||||||
Increase (decrease) in total service and interest costs | $ | 3 | $ | (2 | ) | |||||||||||||
Increase (decrease) in the APBO | $ | 24 | $ | (20 | ) | |||||||||||||
The selection of a discount rate is made annually and is selected by the Company based upon comparison of the expected future cash flows associated with the Company’s future payments under its consolidated postretirement obligations to a yield curve created using high quality bonds that closely match those expected future cash flows. This rate decreased during 2014 due to market conditions. The assumed healthcare trend rate is also reviewed at least annually and is determined based upon both historical experience with the Company’s healthcare benefits paid and expectations of how those trends may or may not change in future years. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||
Schedule Of Finite Lived Intangible Assets | The following table is a summary of the Company’s intangible assets, which are included as a component of Other assets in the Company's Consolidated Balance Sheet, as of December 31, 2014 and 2013: | |||||||||||||||||
Year ended December 31, 2014 | Year ended December 31, 2013 | |||||||||||||||||
(in millions) | Weighted-average useful life (in years) | Gross carrying | Accumulated | Gross carrying amount | Accumulated Amortization | |||||||||||||
amount | amortization | |||||||||||||||||
Customer relationships/marketing agreements | 9 | $ | 38 | $ | 26 | $ | 39 | $ | 23 | |||||||||
Trademarks/trade names | 6 | 36 | 30 | 36 | 25 | |||||||||||||
Owned domestic slots | Indefinite | 303 | n/a | 93 | n/a | |||||||||||||
Leased domestic slots (a) | 39 | 19 | 5 | 19 | 4 | |||||||||||||
Non-compete agreements | 2 | 5 | 5 | 5 | 5 | |||||||||||||
Gate leasehold rights | 19 | 60 | 32 | 60 | 29 | |||||||||||||
Total | 15 | $ | 461 | $ | 98 | $ | 252 | $ | 86 | |||||||||
(a) Useful life of leased slots is based on the stated lease term. | ||||||||||||||||||
Net_Income_Per_Share_Tables
Net Income Per Share (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Schedule Of Earnings Per Share Basic And Diluted | The following table sets forth the computation of basic and diluted net income per share (in millions except per share amounts): | |||||||||||
Year ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
NUMERATOR: | ||||||||||||
Net income | $ | 1,136 | $ | 754 | $ | 421 | ||||||
Incremental income effect of | 4 | 3 | 3 | |||||||||
interest on 5.25% convertible notes | ||||||||||||
Net income after assumed conversion | $ | 1,140 | $ | 757 | $ | 424 | ||||||
DENOMINATOR: | ||||||||||||
Weighted-average shares outstanding, basic | 687 | 710 | 750 | |||||||||
Dilutive effect of Employee stock options and | 3 | 2 | 1 | |||||||||
restricted stock units | ||||||||||||
Dilutive effect of 5.25% convertible notes | 6 | 6 | 6 | |||||||||
Adjusted weighted-average shares outstanding, diluted | 696 | 718 | 757 | |||||||||
NET INCOME PER SHARE: | ||||||||||||
Basic | $ | 1.65 | $ | 1.06 | $ | 0.56 | ||||||
Diluted | $ | 1.64 | $ | 1.05 | $ | 0.56 | ||||||
Potentially dilutive amounts excluded from calculations: | ||||||||||||
Stock options and restricted stock units | — | 9 | 35 | |||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||
Contractual Purchase Commitments | As of December 31, 2014, the Company had firm deliveries and options for Boeing 737-700, 737-800, 737 MAX 7, and 737 MAX 8 aircraft as follows: | |||||||||||
The Boeing Company | The Boeing Company | |||||||||||
737 NG | 737 MAX | |||||||||||
-700 | -800 | Options | Additional -700 A/C | -7 | -8 | Options | Total | |||||
Firm | Firm | Firm | Firm | |||||||||
Orders | Orders | Orders | Orders | |||||||||
2015 | — | 19 | — | 16 | — | — | — | 35 | ||||
2016 | 31 | — | 11 | 4 | — | — | — | 46 | ||||
2017 | 15 | — | 12 | — | — | 14 | — | 41 | ||||
2018 | 10 | — | 12 | — | — | 13 | — | 35 | ||||
2019 | — | — | — | — | 15 | 10 | — | 25 | ||||
2020 | — | — | — | — | 14 | 22 | — | 36 | ||||
2021 | — | — | — | — | 1 | 33 | 18 | 52 | ||||
2022 | — | — | — | — | — | 30 | 19 | 49 | ||||
2023 | — | — | — | — | — | 24 | 23 | 47 | ||||
2024 | — | — | — | — | — | 24 | 23 | 47 | ||||
2025 | — | — | — | — | — | — | 36 | 36 | ||||
2026 | — | — | — | — | — | — | 36 | 36 | ||||
2027 | — | — | — | — | — | — | 36 | 36 | ||||
Total | 56 | -1 | 19 | 35 | 20 | 30 | 170 | -2 | 191 | 521 | ||
(1) The Company has flexibility to substitute 737-800s in lieu of 737-700 firm orders. | ||||||||||||
(2) The Company has flexibility to substitute MAX 7 in lieu of MAX 8 firm orders beginning in 2019. |
Recovered_Sheet2
Supplemental Financial Information (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Table Text Block [Abstract] | |||||||||
Other Assets | |||||||||
(in millions) | 31-Dec-14 | 31-Dec-13 | |||||||
Derivative contracts | $ | 13 | $ | 145 | |||||
Intangible assets | 363 | 166 | |||||||
Non-current investments | 35 | 44 | |||||||
Other | 123 | 175 | |||||||
Other assets | $ | 534 | $ | 530 | |||||
Accounts Payable | |||||||||
(in millions) | 31-Dec-14 | 31-Dec-13 | |||||||
Accounts payable trade | $ | 123 | $ | 189 | |||||
Salaries payable | 160 | 156 | |||||||
Taxes payable | 163 | 146 | |||||||
Aircraft maintenance payable | 314 | 331 | |||||||
Fuel payable | 85 | 102 | |||||||
Other payable | 358 | 323 | |||||||
Accounts payable | $ | 1,203 | $ | 1,247 | |||||
Accrued Liabilities | |||||||||
(in millions) | 31-Dec-14 | 31-Dec-13 | |||||||
Profitsharing and savings plans | $ | 374 | $ | 244 | |||||
Aircraft and other lease related obligations | 159 | 173 | |||||||
Vacation pay | 292 | 278 | |||||||
Health | 84 | 73 | |||||||
Derivative contracts | 174 | 12 | |||||||
Workers compensation | 165 | 161 | |||||||
Property and other taxes | 81 | 65 | |||||||
Other | 236 | 223 | |||||||
Accrued liabilities | $ | 1,565 | $ | 1,229 | |||||
Other Noncurrent Liabilities | |||||||||
(in millions) | 31-Dec-14 | 31-Dec-13 | |||||||
Postretirement obligation | $ | 169 | $ | 138 | |||||
Non-current lease-related obligations | 193 | 290 | |||||||
Other deferred compensation | 174 | 163 | |||||||
Deferred gains from sale and leaseback of aircraft | 53 | 65 | |||||||
Derivative contracts | 622 | 45 | |||||||
Other | 44 | 70 | |||||||
Other non-current liabilities | $ | 1,255 | $ | 771 | |||||
Longterm_Debt_Tables
Long-term Debt (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Schedule of Long-term Debt Instruments | |||||||||
(in millions) | 31-Dec-14 | 31-Dec-13 | |||||||
5.25% Notes due 2014 | — | 357 | |||||||
5.75% Notes due 2016 | 313 | 320 | |||||||
5.25% Convertible Senior Notes due 2016 | 113 | 115 | |||||||
5.125% Notes due 2017 | 316 | 322 | |||||||
Fixed-rate 717 Aircraft Notes payable through 2017—10.37% | — | 41 | |||||||
French Credit Agreements due 2018—1.06% | 36 | 46 | |||||||
Fixed-rate 737 Aircraft Notes payable through 2018—7.02% | 24 | 30 | |||||||
2.75% Notes due 2019 | 300 | — | |||||||
Term Loan Agreement due 2019—6.315% | 178 | 210 | |||||||
Term Loan Agreement due 2019—6.84% | 73 | 85 | |||||||
Term Loan Agreement due 2020—5.223% | 372 | 413 | |||||||
Floating-rate 737 Aircraft Notes payable through 2020 | 300 | 340 | |||||||
Pass Through Certificates due 2022—6.24% | 355 | 371 | |||||||
7.375% Debentures due 2027 | 134 | 136 | |||||||
Capital leases (Note 7) | 199 | 56 | |||||||
$ | 2,713 | $ | 2,842 | ||||||
Less current maturities | 258 | 629 | |||||||
Less debt discount and issuance costs | 21 | 22 | |||||||
$ | 2,434 | $ | 2,191 | ||||||
Leases_Tables
Leases (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||
Capital Leases Aircraft Included In Property And Equipment | Amounts applicable to these aircraft that are included in property and equipment were: | |||||||||||||||||||
(in millions) | 2014 | 2013 | ||||||||||||||||||
Flight equipment | $ | 214 | $ | 69 | ||||||||||||||||
Less: accumulated amortization | 22 | 12 | ||||||||||||||||||
$ | 192 | $ | 57 | |||||||||||||||||
Future Minimum Lease Payments Under Capital Leases And Noncancelable Operating Leases | Future minimum lease payments under capital leases and noncancelable operating leases and rentals to be received under subleases with initial or remaining terms in excess of one year at December 31, 2014, were: | |||||||||||||||||||
(in millions) | Capital | Operating | Subleases | LFMP facility lease* | Operating | |||||||||||||||
leases | leases | leases, net | ||||||||||||||||||
2015 | $ | 33 | $ | 753 | $ | (93 | ) | $ | 24 | $ | 684 | |||||||||
2016 | 42 | 715 | (103 | ) | 24 | 636 | ||||||||||||||
2017 | 45 | 671 | (103 | ) | 24 | 592 | ||||||||||||||
2018 | 44 | 573 | (102 | ) | 25 | 496 | ||||||||||||||
2019 | 43 | 502 | (97 | ) | 25 | 430 | ||||||||||||||
Thereafter | 202 | 1,802 | (144 | ) | 659 | 2,317 | ||||||||||||||
Total minimum lease payments | $ | 409 | $ | 5,016 | $ | (642 | ) | $ | 781 | $ | 5,155 | |||||||||
Less amount representing interest | 75 | |||||||||||||||||||
Present value of minimum lease payments | 334 | |||||||||||||||||||
Less current portion | 23 | |||||||||||||||||||
Long-term portion | $ | 311 | ||||||||||||||||||
* See Note 4 for further details | ||||||||||||||||||||
Sublease Rollforward | A rollforward of the Company's B717 lease/sublease liability for 2014 and 2013 is shown below: | |||||||||||||||||||
(in millions) | B717 lease/sublease liability | |||||||||||||||||||
Balance at December 31, 2012 | $ | 128 | ||||||||||||||||||
Lease/sublease accretion | 6 | |||||||||||||||||||
Lease/sublease payments, net (a) | (12 | ) | ||||||||||||||||||
Balance at December 31, 2013 | $ | 122 | ||||||||||||||||||
Lease/sublease accretion | 5 | |||||||||||||||||||
Lease/sublease expense adjustment | 22 | |||||||||||||||||||
Lease/sublease payments, net (a) | (86 | ) | ||||||||||||||||||
Balance at December 31, 2014 | $ | 63 | ||||||||||||||||||
(a) Includes lease conversion cost payments |
Stock_Plans_Tables
Stock Plans (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | Aggregated information regarding the Company’s RSUs and PBRSUs is summarized below: | |||||||||||||
All Restricted Stock Units | ||||||||||||||
Units (000) | Wtd. Average | |||||||||||||
Fair Value | ||||||||||||||
(per share) | ||||||||||||||
Outstanding December 31, 2011, Unvested | 1,640 | $ | 12.27 | |||||||||||
Granted | 1,939 | 8.21 | ||||||||||||
Vested | (644 | ) | 12.27 | |||||||||||
Surrendered | (59 | ) | 10.54 | |||||||||||
Outstanding December 31, 2012 | 2,876 | 9.57 | ||||||||||||
Granted | 1,139 | 14.34 | ||||||||||||
Vested | (1,263 | ) | 10.24 | |||||||||||
Surrendered | (168 | ) | 9.11 | |||||||||||
Outstanding December 31, 2013 | 2,584 | 11.38 | ||||||||||||
Granted | 834 | (a) | 24.93 | |||||||||||
Vested | (1,239 | ) | 11.05 | |||||||||||
Surrendered | (102 | ) | 13.18 | |||||||||||
Outstanding December 31, 2014, Unvested | 2,077 | $ | 16.92 | |||||||||||
(a) Includes 198 thousand shares of PBRSUs | ||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity | Aggregated information regarding Company issued stock options is summarized below: | |||||||||||||
Stock Option Plans | ||||||||||||||
Options | Wtd. | Wtd. | Aggregate | |||||||||||
0 | average | average | intrinsic | |||||||||||
exercise | remaining | value | ||||||||||||
price | contractual | (millions) | ||||||||||||
term | ||||||||||||||
(years) | ||||||||||||||
Outstanding December 31, 2011 | 47,324 | $ | 14.51 | |||||||||||
Granted | 6 | 9 | ||||||||||||
Exercised | (573 | ) | 8 | |||||||||||
Surrendered | (27,847 | ) | 14.85 | |||||||||||
Outstanding December 31, 2012 | 18,910 | $ | 14.19 | |||||||||||
Granted | — | — | ||||||||||||
Exercised | (6,633 | ) | 13.31 | |||||||||||
Surrendered | (3,116 | ) | 14.94 | |||||||||||
Outstanding December 31, 2013 | 9,161 | $ | 14.58 | |||||||||||
Granted | — | — | ||||||||||||
Exercised | (6,636 | ) | 14.36 | |||||||||||
Surrendered | (48 | ) | 15.74 | |||||||||||
Outstanding December 31, 2014 | 2,477 | $ | 15.17 | 1.62 | $ | 67 | ||||||||
Vested or expected to vest at December 31, 2014 | 2,473 | $ | 15.16 | 1.63 | $ | 67 | ||||||||
Exercisable at December 31, 2014 | 2,308 | $ | 15.05 | 1.67 | $ | 63 | ||||||||
Recovered_Sheet3
Financial Derivative Instruments (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||
Volume of Fuel Hedging | The following table provides information about the Company’s volume of fuel hedging for the years 2015 through 2018 on an “economic” basis considering current market prices: | |||||||||||||||||||||||||||||||
Fuel hedged as of | ||||||||||||||||||||||||||||||||
31-Dec-14 | Derivative underlying commodity type as of | |||||||||||||||||||||||||||||||
Period (by year) | (gallons in millions) | 31-Dec-14 | ||||||||||||||||||||||||||||||
2015 | — | (b) | ||||||||||||||||||||||||||||||
2016 | 885 | (a) | Brent crude oil, Heating oil, and Gulf Coast jet fuel | |||||||||||||||||||||||||||||
2017 | 757 | (a) | WTI crude and Brent crude oil | |||||||||||||||||||||||||||||
2018 | — | (b) | ||||||||||||||||||||||||||||||
(a) Due to the types of derivatives utilized by the Company and different price levels of those contracts, these volumes represent the maximum economic hedge in place and may vary significantly as market prices fluctuate. | ||||||||||||||||||||||||||||||||
(b) In response to the precipitous decline in oil and jet fuel prices during the second half of 2014, the Company took action to offset its 2015 and 2018 fuel derivative portfolios and is now effectively unhedged at current price levels. While the Company still holds derivative contracts as of December 31, 2014, that will settle during 2015 and 2018, the majority of the losses associated with those contracts are substantially locked in. However, if market prices were to increase or decrease significantly related to the 2015 positions prior to these contracts settling, the losses incurred at settlement could be slightly lower or higher than currently expected amounts during that period. | ||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table presents the location of all assets and liabilities associated with the Company’s hedging instruments within the Consolidated Balance Sheet: | |||||||||||||||||||||||||||||||
Asset derivatives | Liability derivatives | |||||||||||||||||||||||||||||||
Balance Sheet | Fair value at | Fair value at | Fair value at | Fair value at | ||||||||||||||||||||||||||||
(in millions) | location | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | |||||||||||||||||||||||||||
Derivatives designated as hedges* | ||||||||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Prepaid expenses and other current assets | $ | — | $ | 74 | $ | — | $ | — | |||||||||||||||||||||||
Fuel derivative contracts (gross) | Other assets | — | 209 | — | 1 | |||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Other noncurrent liabilities | — | — | 643 | — | |||||||||||||||||||||||||||
Interest rate derivative contracts | Other assets | 13 | 20 | — | — | |||||||||||||||||||||||||||
Interest rate derivative contracts | Other noncurrent liabilities | — | — | 61 | 77 | |||||||||||||||||||||||||||
Total derivatives designated as hedges | $ | 13 | $ | 303 | $ | 704 | $ | 78 | ||||||||||||||||||||||||
Derivatives not designated as hedges* | ||||||||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Prepaid expenses and other current assets | $ | — | $ | 175 | $ | — | $ | 182 | |||||||||||||||||||||||
Fuel derivative contracts (gross) | Other assets | — | 16 | — | 99 | |||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Accrued liabilities | 1,190 | 9 | 1,432 | 21 | |||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Other noncurrent liabilities | 157 | — | 273 | — | |||||||||||||||||||||||||||
Total derivatives not designated as hedges | $ | 1,347 | $ | 200 | $ | 1,705 | $ | 302 | ||||||||||||||||||||||||
Total derivatives | $ | 1,360 | $ | 503 | $ | 2,409 | $ | 380 | ||||||||||||||||||||||||
* Represents the position of each trade before consideration of offsetting positions with each counterparty and does not include the impact of cash collateral deposits provided to or received from counterparties. See discussion of credit risk and collateral following in this Note. | ||||||||||||||||||||||||||||||||
Cash Collateral Deposits Due To Or From Third Parties and Net Unrealized Losses | In addition, the Company also had the following amounts associated with fuel derivative instruments and hedging activities in its Consolidated Balance Sheet: | |||||||||||||||||||||||||||||||
Balance Sheet | December 31, | December 31, | ||||||||||||||||||||||||||||||
(in millions) | location | 2014 | 2013 | |||||||||||||||||||||||||||||
Cash collateral deposits provided to counterparties for fuel | Offset against Accrued liabilities | $ | 68 | $ | — | |||||||||||||||||||||||||||
contracts - current | ||||||||||||||||||||||||||||||||
Cash collateral deposits provided to counterparties for fuel | Offset against Other noncurrent liabilities | 198 | — | |||||||||||||||||||||||||||||
contracts- noncurrent | ||||||||||||||||||||||||||||||||
Cash collateral deposits provided to counterparties for interest | Offset against Other noncurrent liabilities | — | 32 | |||||||||||||||||||||||||||||
rate contracts - noncurrent | ||||||||||||||||||||||||||||||||
Due to third parties for fuel contracts | Accrued liabilities | 16 | — | |||||||||||||||||||||||||||||
Receivable from third parties for fuel contracts - current | Accounts and other receivables | — | 57 | |||||||||||||||||||||||||||||
Offsetting Assets | The Company has the following recognized financial assets and financial liabilities resulting from those transactions that meet the scope of the disclosure requirements as necessitated by applicable accounting guidance for balance sheet offsetting: | |||||||||||||||||||||||||||||||
Offsetting of derivative assets | ||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||
(i) | (ii) | (iii) =i) + (ii) | (i) | (ii) | (iii) =i) + (ii) | |||||||||||||||||||||||||||
December 31, 2014 | 31-Dec-13 | |||||||||||||||||||||||||||||||
Description | Balance Sheet location | Gross amounts of recognized assets | Gross amounts offset in the Balance Sheet | Net amounts of assets presented in the Balance Sheet | Gross amounts of recognized assets | Gross amounts offset in the Balance Sheet | Net amounts of assets presented in the Balance Sheet | |||||||||||||||||||||||||
Fuel derivative contracts | Prepaid expenses and other current assets | $ | — | $ | — | $ | — | $ | 249 | $ | (182 | ) | $ | 67 | ||||||||||||||||||
Fuel derivative contracts | Other assets | $ | — | $ | — | $ | — | (a) | $ | 225 | $ | (100 | ) | $ | 125 | (a) | ||||||||||||||||
Fuel derivative contracts | Accrued liabilities | $ | 1,258 | $ | (1,258 | ) | $ | — | (a) | $ | 9 | $ | (9 | ) | $ | — | (a) | |||||||||||||||
Fuel derivative contracts | Other noncurrent liabilities | $ | 355 | $ | (355 | ) | $ | — | (a) | $ | — | $ | — | $ | — | (a) | ||||||||||||||||
Interest rate derivative contracts | Other assets | $ | 13 | $ | — | $ | 13 | (a) | $ | 20 | $ | — | $ | 20 | (a) | |||||||||||||||||
(a) The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the Consolidated Balance Sheet in Note 5. | ||||||||||||||||||||||||||||||||
Offsetting Liabilities | ||||||||||||||||||||||||||||||||
Offsetting of derivative liabilities | ||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||
(i) | (ii) | (iii) =i) + (ii) | (i) | (ii) | (iii) =i) + (ii) | |||||||||||||||||||||||||||
December 31, 2014 | 31-Dec-13 | |||||||||||||||||||||||||||||||
Description | Balance Sheet location | Gross amounts of recognized liabilities | Gross amounts offset in the Balance Sheet | Net amounts of liabilities presented in the Balance Sheet | Gross amounts of recognized liabilities | Gross amounts offset in the Balance Sheet | Net amounts of liabilities presented in the Balance Sheet | |||||||||||||||||||||||||
Fuel derivative contracts | Prepaid expenses and other current assets | $ | — | $ | — | $ | — | $ | 182 | $ | (182 | ) | $ | — | ||||||||||||||||||
Fuel derivative contracts | Other assets | $ | — | $ | — | $ | — | (a) | $ | 100 | $ | (100 | ) | $ | — | (a) | ||||||||||||||||
Fuel derivative contracts | Accrued liabilities | $ | 1,432 | $ | (1,258 | ) | $ | 174 | (a) | $ | 21 | $ | (9 | ) | $ | 12 | (a) | |||||||||||||||
Fuel derivative contracts | Other noncurrent liabilities | $ | 916 | $ | (355 | ) | $ | 561 | (a) | $ | — | $ | — | $ | — | (a) | ||||||||||||||||
Interest rate derivative contracts | Other noncurrent liabilities | $ | 61 | $ | — | $ | 61 | (a) | $ | 77 | $ | (32 | ) | $ | 45 | (a) | ||||||||||||||||
(a) The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the Consolidated Balance Sheet in Note 5. | ||||||||||||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | The following tables present the impact of derivative instruments and their location within the Consolidated Statement of Income for the year ended December 31, 2014 and 2013: | |||||||||||||||||||||||||||||||
Derivatives in cash flow hedging relationships | ||||||||||||||||||||||||||||||||
(Gain) loss recognized in AOCI on derivatives (effective portion) | (Gain) loss reclassified from AOCI into income (effective portion)(a) | (Gain) loss recognized in income on derivatives (ineffective portion)(b) | ||||||||||||||||||||||||||||||
Year ended | Year ended | Year ended | ||||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
Fuel derivative contracts | $ | 749 | * | $ | 52 | * | $ | 22 | * | $ | 103 | * | $ | 7 | $ | 10 | ||||||||||||||||
Interest rate derivatives | 6 | * | (14 | ) | * | 14 | * | 18 | * | (4 | ) | 1 | ||||||||||||||||||||
Total | $ | 755 | $ | 38 | $ | 36 | $ | 121 | $ | 3 | $ | 11 | ||||||||||||||||||||
*Net of tax | ||||||||||||||||||||||||||||||||
(a) Amounts related to fuel derivative contracts and interest rate derivatives are included in Fuel and oil and Interest expense, respectively. | ||||||||||||||||||||||||||||||||
(b) Amounts are included in Other (gains) losses, net. | ||||||||||||||||||||||||||||||||
Derivatives Not in Cash Flow Hedging Relationships | ||||||||||||||||||||||||||||||||
Derivatives not in cash flow hedging relationships | ||||||||||||||||||||||||||||||||
(Gain) loss | ||||||||||||||||||||||||||||||||
recognized in income on | ||||||||||||||||||||||||||||||||
derivatives | ||||||||||||||||||||||||||||||||
Year ended | Location of (gain) loss | |||||||||||||||||||||||||||||||
December 31, | recognized in income | |||||||||||||||||||||||||||||||
(in millions) | 2014 | 2013 | on derivatives | |||||||||||||||||||||||||||||
Fuel derivative contracts | $ | 244 | $ | (100 | ) | Other (gains) losses, net | ||||||||||||||||||||||||||
Fair Values of Fuel Derivatives, Amounts Posted as Collateral, and Collateral Posting Threshold Amounts | The following table provides the fair values of fuel derivatives, amounts posted as collateral, and applicable collateral posting threshold amounts as of December 31, 2014, at which such postings are triggered: | |||||||||||||||||||||||||||||||
Counterparty (CP) | ||||||||||||||||||||||||||||||||
(in millions) | A | B | C | D | E | F | Other(a) | Total | ||||||||||||||||||||||||
Fair value of fuel derivatives | $ | (333 | ) | $ | (136 | ) | $ | (122 | ) | $ | (219 | ) | $ | (66 | ) | $ | (86 | ) | $ | (39 | ) | $ | (1,001 | ) | ||||||||
Cash collateral held (by) CP | (50 | ) | (98 | ) | (57 | ) | — | (23 | ) | (38 | ) | — | (266 | ) | ||||||||||||||||||
Aircraft collateral pledged to CP | (134 | ) | — | — | — | — | — | — | (134 | ) | ||||||||||||||||||||||
Letters of credit (LC) | (100 | ) | — | — | (150 | ) | — | — | — | (250 | ) | |||||||||||||||||||||
Option to substitute LC for aircraft | <(400)(g) | (100) to (500)(d) | N/A | (150) to (550)(d) | N/A | N/A | ||||||||||||||||||||||||||
Option to substitute LC for cash | (50) to (150)(d) | >(500) | (100) to (150)(e) | (75) to (150) or >(550)(d) | N/A | (f) | ||||||||||||||||||||||||||
If credit rating is investment | ||||||||||||||||||||||||||||||||
grade, fair value of fuel | ||||||||||||||||||||||||||||||||
derivative level at which: | ||||||||||||||||||||||||||||||||
Cash is provided to CP | (50) to (200) or >(600) | (50) to (100) or >(500) | >(75) | (75) to (150) or >(550) | >(50) | >(50) | ||||||||||||||||||||||||||
Cash is received from CP | >50 | >150 | >175(c) | >200 | >30 | >(50) | ||||||||||||||||||||||||||
Aircraft or cash can be pledged to | (200) to (600)(d) | (100) to (500)(d) | N/A | (150) to (550)(d) | N/A | N/A | ||||||||||||||||||||||||||
CP as collateral | ||||||||||||||||||||||||||||||||
If credit rating is non-investment | ||||||||||||||||||||||||||||||||
grade, fair value of fuel derivative | ||||||||||||||||||||||||||||||||
level at which: | ||||||||||||||||||||||||||||||||
Cash is provided to CP | (0) to (200) or >(600) | (0) to (100) or >(500) | (b) | (0) to (150) or >(550) | (b) | (b) | ||||||||||||||||||||||||||
Cash is received from CP | (b) | (b) | (b) | (b) | (b) | (b) | ||||||||||||||||||||||||||
Aircraft or cash can be pledged to | (200) to (600) | (100) to (500) | N/A | (150) to (550) | N/A | N/A | ||||||||||||||||||||||||||
CP as collateral | ||||||||||||||||||||||||||||||||
(a) Individual counterparties with fair value of fuel derivatives <$25 million. | ||||||||||||||||||||||||||||||||
(b) Cash collateral is provided at 100 percent of fair value of fuel derivative contracts. | ||||||||||||||||||||||||||||||||
(c) Thresholds may vary based on changes in credit ratings within investment grade. | ||||||||||||||||||||||||||||||||
(d) The Company has the option of providing cash, letters of credit, or pledging aircraft as collateral. | ||||||||||||||||||||||||||||||||
(e) The Company has the option of providing cash or letters of credit as collateral. | ||||||||||||||||||||||||||||||||
(f) The Company has the option to substitute letters of credit for 100 percent of cash collateral requirement. | ||||||||||||||||||||||||||||||||
(g) The Company has the option of providing letters of credit in addition to aircraft collateral if the appraised value of the aircraft does not meet the collateral requirements. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2014, and December 31, 2013: | ||||||||||||||||
Fair value measurements at reporting date using: | |||||||||||||||||
Quoted prices in | Significant | Significant | |||||||||||||||
active markets | other observable | unobservable | |||||||||||||||
for identical assets | inputs | inputs | |||||||||||||||
Description | December 31, 2014 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets | (in millions) | ||||||||||||||||
Cash equivalents | |||||||||||||||||
Cash equivalents (a) | $ | 1,110 | $ | 1,110 | $ | — | $ | — | |||||||||
Commercial paper | 70 | — | 70 | — | |||||||||||||
Certificates of deposit | 4 | — | 4 | — | |||||||||||||
Eurodollar Time Deposits | 98 | — | 98 | — | |||||||||||||
Short-term investments: | |||||||||||||||||
Treasury bills | 1,450 | 1,450 | — | — | |||||||||||||
Certificates of deposit | 256 | — | 256 | — | |||||||||||||
Noncurrent investments (b) | |||||||||||||||||
Auction rate securities | 27 | — | — | 27 | |||||||||||||
Interest rate derivatives (see Note 10) | 13 | — | 13 | — | |||||||||||||
Fuel derivatives: | |||||||||||||||||
Swap contracts (c) | 455 | — | 455 | — | |||||||||||||
Option contracts (c) | 892 | — | — | 892 | |||||||||||||
Other available-for-sale securities | 68 | 63 | — | 5 | |||||||||||||
Total assets | $ | 4,443 | $ | 2,623 | $ | 896 | $ | 924 | |||||||||
Liabilities | |||||||||||||||||
Fuel derivatives: | |||||||||||||||||
Swap contracts (c) | $ | (365 | ) | $ | — | $ | (365 | ) | $ | — | |||||||
Option contracts (c) | (1,983 | ) | — | — | (1,983 | ) | |||||||||||
Interest rate derivatives (see Note 10) | (61 | ) | — | (61 | ) | — | |||||||||||
Total liabilities | $ | (2,409 | ) | $ | — | $ | (426 | ) | $ | (1,983 | ) | ||||||
(a) Cash equivalents are primarily composed of money market investments. | |||||||||||||||||
(b) Noncurrent investments are included in Other assets in the Consolidated Balance Sheet. | |||||||||||||||||
(c) In the Consolidated Balance Sheet amounts are presented as a net liability. See Note 10. | |||||||||||||||||
Fair value measurements at reporting date using: | |||||||||||||||||
Quoted prices in | Significant | Significant | |||||||||||||||
active markets | other observable | unobservable | |||||||||||||||
for identical assets | inputs | inputs | |||||||||||||||
Description | December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets | (in millions) | ||||||||||||||||
Cash equivalents | |||||||||||||||||
Cash equivalents (a) | $ | 992 | $ | 992 | $ | — | $ | — | |||||||||
Commercial paper | 280 | — | 280 | — | |||||||||||||
Certificates of deposit | 23 | — | 23 | — | |||||||||||||
Eurodollar Time Deposits | 60 | — | 60 | — | |||||||||||||
Short-term investments: | |||||||||||||||||
Treasury bills | 1,570 | 1,570 | — | — | |||||||||||||
Certificates of deposit | 227 | — | 227 | — | |||||||||||||
Noncurrent investments (b) | |||||||||||||||||
Auction rate securities | 39 | — | — | 39 | |||||||||||||
Interest rate derivatives (see Note 10) | 20 | — | 20 | — | |||||||||||||
Fuel derivatives: | |||||||||||||||||
Swap contracts (c) | 16 | — | 16 | — | |||||||||||||
Option contracts (c) | 458 | — | — | 458 | |||||||||||||
Option contracts (d) | 9 | — | — | 9 | |||||||||||||
Other available-for-sale securities | 63 | 58 | — | 5 | |||||||||||||
Total assets | $ | 3,757 | $ | 2,620 | $ | 626 | $ | 511 | |||||||||
Liabilities | |||||||||||||||||
Fuel derivatives: | |||||||||||||||||
Swap contracts (c) | $ | (8 | ) | $ | — | $ | (8 | ) | $ | — | |||||||
Option contracts (c) | (274 | ) | — | — | (274 | ) | |||||||||||
Swap contracts (d) | (21 | ) | — | — | (21 | ) | |||||||||||
Interest rate derivatives (see Note 10) | (77 | ) | — | (77 | ) | — | |||||||||||
Total liabilities | $ | (380 | ) | $ | — | $ | (85 | ) | $ | (295 | ) | ||||||
(a) Cash equivalents are primarily composed of money market investments. | |||||||||||||||||
(b) Noncurrent investments are included in Other assets in the Consolidated Balance Sheet. | |||||||||||||||||
(c) In the Consolidated Balance Sheet amounts are presented as a net asset. See Note 10. | |||||||||||||||||
(d) In the Consolidated Balance Sheet amounts are presented as a net liability. See Note 10. | |||||||||||||||||
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation | The following tables present the Company’s activity for items measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for 2014 and 2013: | ||||||||||||||||
Fair value measurements using significant | |||||||||||||||||
unobservable inputs (Level 3) | |||||||||||||||||
Fuel | Auction rate | Other | |||||||||||||||
(in millions) | derivatives | securities | securities | Total | |||||||||||||
Balance at December 31, 2013 | $ | 172 | $ | 39 | $ | 5 | $ | 216 | |||||||||
Total gains or (losses) (realized or unrealized) | |||||||||||||||||
Included in earnings | (439 | ) | — | — | (439 | ) | |||||||||||
Included in other comprehensive income | (1,091 | ) | 3 | — | (1,088 | ) | |||||||||||
Purchases | 403 | (a) | — | — | 403 | ||||||||||||
Sales | (155 | ) | (a) | (15 | ) | — | (170 | ) | |||||||||
Settlements | 19 | — | — | 19 | |||||||||||||
Balance at December 31, 2014 | $ | (1,091 | ) | $ | 27 | (b) | $ | 5 | $ | (1,059 | ) | ||||||
The amount of total losses for the period | $ | (450 | ) | $ | — | $ | — | $ | (450 | ) | |||||||
included in earnings attributable to the | |||||||||||||||||
change in unrealized gains or losses relating | |||||||||||||||||
to assets still held at December 31, 2014 | |||||||||||||||||
(a) The purchase and sale of fuel derivatives are recorded gross based on the structure of the derivative instrument and | |||||||||||||||||
whether a contract with multiple derivatives is purchased as a single instrument or separate instruments. | |||||||||||||||||
(b) Included in Other assets in the Consolidated Balance Sheet. | |||||||||||||||||
Fair value measurements using significant | |||||||||||||||||
unobservable inputs (Level 3) | |||||||||||||||||
Fuel | Auction rate | Other | |||||||||||||||
(in millions) | derivatives | securities | securities | Total | |||||||||||||
Balance at December 31, 2012 | $ | 219 | $ | 36 | $ | 5 | $ | 260 | |||||||||
Total gains or (losses) (realized or unrealized) | |||||||||||||||||
Included in earnings | 71 | — | — | 71 | |||||||||||||
Included in other comprehensive income | (107 | ) | 3 | — | (104 | ) | |||||||||||
Purchases | 357 | (a) | — | — | 357 | ||||||||||||
Sales | (417 | ) | (a) | — | — | (417 | ) | ||||||||||
Settlements | 49 | — | — | 49 | |||||||||||||
Balance at December 31, 2013 | $ | 172 | $ | 39 | (b) | $ | 5 | $ | 216 | ||||||||
The amount of total gains for the period | $ | 86 | $ | — | $ | — | $ | 86 | |||||||||
included in earnings attributable to the | |||||||||||||||||
change in unrealized gains or losses relating | |||||||||||||||||
to assets still held at December 31, 2013 | |||||||||||||||||
(a) The purchase and sale of fuel derivatives are recorded gross based on the structure of the derivative instrument and | |||||||||||||||||
whether a contract with multiple derivatives is purchased as a single instrument or separate instruments. | |||||||||||||||||
(b) Included in Other assets in the Consolidated Balance Sheet. | |||||||||||||||||
Fair Value Valuation Techniques | The following table presents a range of the unobservable inputs utilized in the fair value measurements of the Company’s assets and liabilities classified as Level 3 at December 31, 2014: | ||||||||||||||||
Quantitative information about Level 3 fair value measurements | |||||||||||||||||
Valuation technique | Unobservable input | Period (by year) | Range | ||||||||||||||
Fuel derivatives | Option model | Implied volatility | 2015 | 23-47% | |||||||||||||
2016 | 24-36% | ||||||||||||||||
2017 | 19-30% | ||||||||||||||||
2018 | 25-27% | ||||||||||||||||
Auction rate securities | Discounted cash flow | Time to principal recovery | 8 years | ||||||||||||||
Illiquidity premium | 3% | ||||||||||||||||
Counterparty credit spread | 1-2% | ||||||||||||||||
Fair value, by Balance Sheet Grouping | |||||||||||||||||
(in millions) | Carrying value | Estimated fair value | Fair value level hierarchy | ||||||||||||||
5.75% Notes due 2016 | 313 | 335 | Level 2 | ||||||||||||||
5.25% Convertible Senior Notes due 2016 | 113 | 318 | Level 2 | ||||||||||||||
5.125% Notes due 2017 | 316 | 338 | Level 2 | ||||||||||||||
French Credit Agreements due 2018 - 1.06% | 36 | 36 | Level 3 | ||||||||||||||
Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02% | 24 | 25 | Level 3 | ||||||||||||||
2.75% Notes due 2019 | 300 | 304 | Level 2 | ||||||||||||||
Term Loan Agreement due 2019 - 6.315% | 178 | 178 | Level 3 | ||||||||||||||
Term Loan Agreement due 2019 - 6.84% | 73 | 79 | Level 3 | ||||||||||||||
Term Loan Agreement due 2020 - 5.223% | 372 | 367 | Level 3 | ||||||||||||||
Floating-rate 737 Aircraft Notes payable through 2020 | 300 | 293 | Level 3 | ||||||||||||||
Pass Through Certificates due 2022 - 6.24% | 355 | 410 | Level 2 | ||||||||||||||
7.375% Debentures due 2027 | 134 | 160 | Level 2 | ||||||||||||||
Recovered_Sheet4
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||
Rollforward of the Amounts Included in AOCI, Net of Taxes | A rollforward of the amounts included in AOCI, net of taxes, is shown below for 2014 and 2013: | |||||||||||||||||||||||
(in millions) | Fuel derivatives | Interest rate derivatives | Defined benefit plan items | Other | Deferred tax impact | Accumulated other | ||||||||||||||||||
comprehensive income (loss) | ||||||||||||||||||||||||
Balance at December 31, 2012 | $ | (103 | ) | $ | (108 | ) | $ | 26 | $ | (8 | ) | $ | 74 | $ | (119 | ) | ||||||||
changes in fair value | (82 | ) | 22 | 39 | 16 | — | (5 | ) | ||||||||||||||||
Reclassification to earnings | 165 | 28 | — | — | -72 | 121 | ||||||||||||||||||
Balance at December 31, 2013 | $ | (20 | ) | $ | (58 | ) | $ | 65 | $ | 8 | $ | 2 | $ | (3 | ) | |||||||||
changes in fair value | (1,191 | ) | (10 | ) | (24 | ) | — | 454 | (771 | ) | ||||||||||||||
Reclassification to earnings | 34 | 23 | — | — | -21 | 36 | ||||||||||||||||||
Balance at December 31, 2014 | $ | (1,177 | ) | $ | (45 | ) | $ | 41 | $ | 8 | $ | 435 | $ | (738 | ) | |||||||||
Reclassification out of Accumulated Other Comprehensive Income | The following table illustrates the significant amounts reclassified out of each component of AOCI for the year ended December 31, 2014: | |||||||||||||||||||||||
Year ended December 31, 2014 | ||||||||||||||||||||||||
(in millions) | Amounts reclassified from AOCI | Affected line item in the Consolidated Statement of Comprehensive Income | ||||||||||||||||||||||
AOCI components | ||||||||||||||||||||||||
Unrealized gain on fuel derivative instruments | $ | 34 | Fuel and oil expense | |||||||||||||||||||||
12 | Less: Tax expense | |||||||||||||||||||||||
$ | 22 | Net of tax | ||||||||||||||||||||||
Unrealized gain on interest rate derivative instruments | $ | 23 | Interest expense | |||||||||||||||||||||
9 | Less: Tax expense | |||||||||||||||||||||||
$ | 14 | Net of tax | ||||||||||||||||||||||
Total reclassifications for the period | $ | 36 | Net of tax | |||||||||||||||||||||
Employee_Retirement_Plans_Tabl
Employee Retirement Plans (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||
Schedule of Changes in Accumulated Postemployment Benefit Obligations | The following table shows the change in the accumulated postretirement benefit obligation (APBO) for the years ended December 31, 2014 and 2013: | ||||||||||||
(in millions) | 2014 | 2013 | |||||||||||
APBO at beginning of period | $ | 138 | $ | 148 | |||||||||
Service cost | 10 | 30 | |||||||||||
Interest cost | 7 | 4 | |||||||||||
Benefits paid | (4 | ) | (3 | ) | |||||||||
Actuarial (gain)/loss | 21 | (41 | ) | ||||||||||
Settlements | $ | (3 | ) | $ | — | ||||||||
APBO at end of period | $ | 169 | $ | 138 | |||||||||
Schedule of Amounts Recognized in Balance Sheet | The following table reconciles the funded status of the plans to the accrued postretirement benefit cost recognized in Other non-current liabilities on the Company’s Consolidated Balance Sheet at December 31, 2014 and 2013. | ||||||||||||
(in millions) | 2014 | 2013 | |||||||||||
Funded status | $ | (169 | ) | $ | (138 | ) | |||||||
Unrecognized net actuarial gain | (53 | ) | (80 | ) | |||||||||
Unrecognized prior service cost | 12 | 15 | |||||||||||
Accumulated other comprehensive income | 41 | 65 | |||||||||||
Cost recognized on Consolidated Balance Sheet | $ | (169 | ) | $ | (138 | ) | |||||||
Schedule of Net Benefit Costs | The consolidated periodic postretirement benefit cost for the years ended December 31, 2014, 2013, and 2012, included the following: | ||||||||||||
(in millions) | 2014 | 2013 | 2012 | ||||||||||
Service cost | $ | 10 | $ | 30 | $ | 20 | |||||||
Interest cost | 7 | 4 | 4 | ||||||||||
Amortization of prior service cost | 3 | 3 | — | ||||||||||
Recognized actuarial gain | (4 | ) | (4 | ) | (5 | ) | |||||||
Settlements | $ | (1 | ) | $ | — | $ | — | ||||||
Net periodic postretirement benefit cost | $ | 15 | $ | 33 | $ | 19 | |||||||
Schedule of Assumptions Used | The following actuarial assumptions were used to account for the Company’s postretirement benefit plans at December 31, 2014, 2013, and 2012: | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Weighted-average discount rate | 4.1 | % | 5.05 | % | 2.9 | % | |||||||
Assumed healthcare cost trend rate (1) | 6.88 | % | 7.5 | % | 8 | % | |||||||
-1 | The assumed healthcare cost trend rate is assumed to remain at 6.88% for 2015, then decline gradually to 5.00% by 2025 and remain level thereafter. | ||||||||||||
Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates | |||||||||||||
(in millions) | 1% increase | 1% decrease | |||||||||||
Increase (decrease) in total service and interest costs | $ | 3 | $ | (2 | ) | ||||||||
Increase (decrease) in the APBO | $ | 24 | $ | (20 | ) | ||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Components of Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities at December 31, 2014 and 2013, are as follows: | ||||||||||||
(in millions) | 2014 | 2013 | |||||||||||
DEFERRED TAX LIABILITIES: | |||||||||||||
Accelerated depreciation | $ | 4,277 | $ | 4,069 | |||||||||
Fuel derivative instruments | — | 36 | |||||||||||
Other | 51 | 84 | |||||||||||
Total deferred tax liabilities | 4,328 | 4,189 | |||||||||||
DEFERRED TAX ASSETS: | |||||||||||||
Fuel derivative instruments | 521 | 8 | |||||||||||
Deferred gains from sale and leaseback of aircraft | 20 | 24 | |||||||||||
Capital and operating leases | 125 | 163 | |||||||||||
Construction obligation | 209 | 168 | |||||||||||
Accrued engine maintenance | 83 | 90 | |||||||||||
Accrued employee benefits | 334 | 307 | |||||||||||
State taxes | 65 | 74 | |||||||||||
Business partner income | 90 | 457 | |||||||||||
Net operating losses and credit carryforwards | 3 | 14 | |||||||||||
Other | 96 | 118 | |||||||||||
Total deferred tax assets | 1,546 | 1,423 | |||||||||||
Net deferred tax liability | $ | 2,782 | $ | 2,766 | |||||||||
Components of the Income Tax Provision | The provision for income taxes is composed of the following: | ||||||||||||
(in millions) | 2014 | 2013 | 2012 | ||||||||||
CURRENT: | |||||||||||||
Federal | $ | 203 | $ | 355 | $ | (45 | ) | ||||||
State | 29 | 44 | 12 | ||||||||||
Total current | 232 | 399 | (33 | ) | |||||||||
DEFERRED: | |||||||||||||
Federal | 421 | 62 | 287 | ||||||||||
State | 27 | (6 | ) | 10 | |||||||||
Total deferred | 448 | 56 | 297 | ||||||||||
$ | 680 | $ | 455 | $ | 264 | ||||||||
Income Tax Provision Reconciliation To Federal Income Tax Statutory Rate | The effective tax rate on income before income taxes differed from the federal income tax statutory rate for the following reasons: | ||||||||||||
(in millions) | 2014 | 2013 | 2012 | ||||||||||
Tax at statutory U.S. tax rates | $ | 636 | $ | 423 | $ | 240 | |||||||
Nondeductible items | 9 | 10 | 10 | ||||||||||
State income taxes, net of federal benefit | 37 | 25 | 14 | ||||||||||
Other, net | (2 | ) | (3 | ) | — | ||||||||
Total income tax provision | $ | 680 | $ | 455 | $ | 264 | |||||||
Quarterly_Financial_Data_Table
Quarterly Financial Data (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Quarterly Financial Data [Abstract] | ||||||||||||||||||
Schedule of Quarterly Financial Information | ||||||||||||||||||
Three months ended | ||||||||||||||||||
(in millions except per share amounts) | March 31 | June 30 | Sept. 30 | Dec. 31 | ||||||||||||||
2014 | ||||||||||||||||||
Operating revenues | $ | 4,166 | $ | 5,011 | $ | 4,800 | $ | 4,628 | (a) | |||||||||
Operating income | 215 | 775 | 614 | 621 | ||||||||||||||
Income before income taxes | 244 | 746 | 525 | 302 | ||||||||||||||
Net income | 152 | 465 | 329 | 190 | ||||||||||||||
Net income per share, basic | 0.22 | 0.67 | 0.48 | 0.28 | (a) | |||||||||||||
Net income per share, diluted | 0.22 | 0.67 | 0.48 | 0.28 | (a) | |||||||||||||
31-Mar | 30-Jun | Sept. 30 | Dec. 31 | |||||||||||||||
2013 | ||||||||||||||||||
Operating revenues | $ | 4,084 | $ | 4,643 | $ | 4,545 | $ | 4,428 | ||||||||||
Operating income | 70 | 433 | 390 | 386 | ||||||||||||||
Income (loss) before income taxes | 94 | 363 | 419 | 334 | ||||||||||||||
Net income (loss) | 59 | 224 | 259 | 212 | ||||||||||||||
Net income (loss) per share, basic | 0.08 | 0.31 | 0.37 | 0.3 | ||||||||||||||
Net income (loss) per share, diluted | 0.08 | 0.31 | 0.37 | 0.3 | ||||||||||||||
(a) Includes a change in estimate, recorded on a prospective basis, effective October 1, 2014, which increased Passenger revenues by approximately $55 million and increased both Basic and Diluted net income per share by $.04. See Note 1 for further detail. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | 3 Months Ended | ||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2014 | ||||
Accounting Policies [Abstract] | ||||||||
Prior Period Reclassification Adjustment | ($14,000,000) | |||||||
Inventory reserve for obsolescence | 46,000,000 | 36,000,000 | 46,000,000 | |||||
The percentage of the amount received per flight segment sold that relate to free travel-SWA (in hundredths) | 100.00% | |||||||
Frequent flyer points and flight credits liability | 1,300,000,000 | 1,100,000,000 | 1,300,000,000 | |||||
Capitalized computer software, net | 403,000,000 | 357,000,000 | 403,000,000 | |||||
Computer software depreciation expense | 122,000,000 | 90,000,000 | 59,000,000 | |||||
Advertising costs | 207,000,000 | 208,000,000 | 223,000,000 | |||||
Concentration Risk [Line Items] | ||||||||
The percentage of employees subject to amendable agreements in the current year (in hundredths) | 70.00% | 70.00% | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||||
Gross carrying amount (in millions) (a) | 461,000,000 | 252,000,000 | 461,000,000 | |||||
Weighted-average useful life (in years) | 15 years | |||||||
Accumulated amortization (in millions) (a) | 98,000,000 | 86,000,000 | 98,000,000 | |||||
Amortization of intangible assets | 13,000,000 | 19,000,000 | 25,000,000 | |||||
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | ||||||||
2015 | 11,000,000 | 11,000,000 | ||||||
2016 | 8,000,000 | 8,000,000 | ||||||
2017 | 5,000,000 | 5,000,000 | ||||||
2018 | 5,000,000 | 5,000,000 | ||||||
2019 | 4,000,000 | 4,000,000 | ||||||
Thereafter | 27,000,000 | 27,000,000 | ||||||
Customer relationships/marketing agreements | ||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||||
Gross carrying amount of finite-lived intangible assets | 38,000,000 | 39,000,000 | 38,000,000 | |||||
Weighted-average useful life (in years) | 9 years | |||||||
Accumulated amortization (in millions) (a) | 26,000,000 | 23,000,000 | 26,000,000 | |||||
Trademarks/trade names | ||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||||
Gross carrying amount of finite-lived intangible assets | 36,000,000 | 36,000,000 | 36,000,000 | |||||
Weighted-average useful life (in years) | 6 years | |||||||
Accumulated amortization (in millions) (a) | 30,000,000 | 25,000,000 | 30,000,000 | |||||
Owned domestic slots | ||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||||
Gross carrying amount of indefinite-lived intangible assets | 303,000,000 | 93,000,000 | 303,000,000 | |||||
Contract-Based Intangible Assets [Member] | ||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||||
Gross carrying amount of finite-lived intangible assets | 19,000,000 | [1] | 19,000,000 | [1] | 19,000,000 | [1] | ||
Weighted-average useful life (in years) | 39 years | [1] | ||||||
Accumulated amortization (in millions) (a) | 5,000,000 | [1] | 4,000,000 | [1] | 5,000,000 | [1] | ||
Non-compete agreements | ||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||||
Gross carrying amount of finite-lived intangible assets | 5,000,000 | 5,000,000 | 5,000,000 | |||||
Weighted-average useful life (in years) | 2 years | |||||||
Accumulated amortization (in millions) (a) | 5,000,000 | 5,000,000 | 5,000,000 | |||||
Gate leasehold rights | ||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||||
Gross carrying amount of finite-lived intangible assets | 60,000,000 | 60,000,000 | 60,000,000 | |||||
Weighted-average useful life (in years) | 19 years | |||||||
Accumulated amortization (in millions) (a) | 32,000,000 | 29,000,000 | 32,000,000 | |||||
Flight equipment | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Minimum percentage of cost estimated residual value (in hundredths) | 2.00% | |||||||
Maximum percentage of cost estimated as residual value (in hundredths) | 20.00% | |||||||
Flight equipment | Minimum | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Property, Plant, and Equipment Useful Life | 23 years | |||||||
Flight equipment | Maximum | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Property, Plant, and Equipment Useful Life | 25 years | |||||||
Property, Plant and Equipment [Member] | Minimum | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Property, Plant, and Equipment Useful Life | 5 years | |||||||
Property, Plant and Equipment [Member] | Maximum | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Property, Plant, and Equipment Useful Life | 30 years | |||||||
Ground property and equipment | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Minimum percentage of cost estimated residual value (in hundredths) | 0.00% | |||||||
Maximum percentage of cost estimated as residual value (in hundredths) | 10.00% | |||||||
Software | Minimum | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Property, Plant, and Equipment Useful Life | 5 years 0 months 0 days | |||||||
Software | Maximum | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Property, Plant, and Equipment Useful Life | 15 years 0 months 0 days | |||||||
Change In Estimated Useful Life | ||||||||
Change in Accounting Estimate [Line Items] | ||||||||
Change In Accounting Estimate Financial Effect On Depreciation Expense | 12,000,000 | |||||||
Change in accounting estimate, financial effect on net income | 6,000,000 | |||||||
Change in accounting estimate, financial effect on net income per share (in dollars per share) | ($0.01) | |||||||
Change In Estimated Residual Values | ||||||||
Change in Accounting Estimate [Line Items] | ||||||||
Residual Values Percent Of Original Cost Subsequent To Change | 2.00% | |||||||
Change In Accounting Estimate Financial Effect On Depreciation Expense | 34,000,000 | |||||||
Change in accounting estimate, financial effect on net income | 18,000,000 | |||||||
Change in accounting estimate, financial effect on net income per share (in dollars per share) | $0.02 | |||||||
Residual Values Percent Of Original Cost Prior To Change | 10.00% | |||||||
Change in Spoilage Estimate [Domain] | ||||||||
Change in Accounting Estimate [Line Items] | ||||||||
Change in Accounting Estimate Financial Effect on Passenger Revenue | 55,000,000 | |||||||
Change in accounting estimate, financial effect on net income, spoilage adjustment | 29,000,000 | |||||||
Change in accounting estimate,financial effect on earnings per share | $0.04 | |||||||
Fuel derivatives | ||||||||
Accounting Policies [Abstract] | ||||||||
Total collateral already posted aggregate fair value | 266,000,000 | 0 | 266,000,000 | |||||
Other Noncurrent Liabilities | Fuel derivatives | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Collateral Already Posted, Aggregate Fair Value | 198,000,000 | 0 | 198,000,000 | |||||
Other Noncurrent Liabilities | Interest rate derivatives | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Collateral Already Posted, Aggregate Fair Value | $0 | $32,000,000 | $0 | |||||
Unionized Employees concentration risk | ||||||||
Concentration Risk [Line Items] | ||||||||
The percentage of Company's employees that are unionized and covered by collective bargaining agreements (in hundredths) | 83.00% | |||||||
[1] | Useful life of leased slots is based on the stated lease term. |
Net_Income_Per_Share_Details
Net Income Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
NUMERATOR: | ||||||||||||
Net income | $190 | $329 | $465 | $152 | $212 | $259 | $224 | $59 | $1,136 | $754 | $421 | |
Incremental income effect of interest on 5.25% convertible notes | 4 | 3 | 3 | |||||||||
Net income after assumed conversion | $1,140 | $757 | $424 | |||||||||
DENOMINATOR: | ||||||||||||
Weighted-average shares outstanding, basic | 687 | 710 | 750 | |||||||||
Dilutive effect of Employee stock options and restricted stock units | 3 | 2 | 1 | |||||||||
Dilutive effect of 5.25% convertible notes | 6 | 6 | 6 | |||||||||
Adjusted weighted-average shares outstanding, diluted | 696 | 718 | 757 | |||||||||
NET INCOME PER SHARE: | ||||||||||||
Basic (in dollars per share) | $0.28 | [1] | $0.48 | $0.67 | $0.22 | $0.30 | $0.37 | $0.31 | $0.08 | $1.65 | $1.06 | $0.56 |
Diluted (in dollars per share) | $0.28 | [1] | $0.48 | $0.67 | $0.22 | $0.30 | $0.37 | $0.31 | $0.08 | $1.64 | $1.05 | $0.56 |
Stock Options | ||||||||||||
Potentially dilutive amounts excluded from calculations: | ||||||||||||
Potentially dilutive amounts excluded from calculations: | 0 | 9 | 35 | |||||||||
[1] | Includes a change in estimate, recorded on a prospective basis, effective October 1, 2014, which increased Passenger revenues by approximately $55 million and increased both Basic and Diluted net income per share by $.04. See Note 1 for further detail. |
Net_Income_Per_Share_Parenthet
Net Income Per Share Parenthetical (Details) (Convertible Debt, 5.25% Convertible Senior Notes due 2016) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Convertible Debt | 5.25% Convertible Senior Notes due 2016 | |||
Debt Instrument [Line Items] | |||
Interest rate stated in the debt agreement (in hundredths) | 5.25% | 5.25% | 5.25% |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | 3 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2010 | ||
aircraft | ||||||
Airport Project [Line Items] | ||||||
Assets constructed for others | $621,000,000 | $453,000,000 | ||||
Depreciation and amortization | 938,000,000 | 867,000,000 | 844,000,000 | |||
Long-term Purchase Commitment [Line Items] | ||||||
Firm - 737NG 700 (in units) | 56 | [1] | ||||
Firm - 737NG 800 (in units) | 19 | |||||
Options - 737NG (in units) | 35 | |||||
Additional - 700 A/C (in units) | 20 | |||||
Firm - 737MAX (in units) | 30 | |||||
Firm - 738MAX (in units) | 170 | [2] | ||||
Options - 737MAX (in units) | 191 | |||||
Total | 521 | |||||
Aircraft | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Committed expenditures, 2015 | 836,000,000 | |||||
Committed expenditures, 2016 | 1,200,000,000 | |||||
Committed expenditures, 2017 | 1,200,000,000 | |||||
Committed expenditures, 2018 | 1,000,000,000 | |||||
Committed expenditures, 2019 | 1,100,000,000 | |||||
Committed expenditures, 2020 and beyond | 5,700,000,000 | |||||
2015 | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Firm - 737NG 700 (in units) | 0 | |||||
Firm - 737NG 800 (in units) | 19 | |||||
Options - 737NG (in units) | 0 | |||||
Additional - 700 A/C (in units) | 16 | |||||
Firm - 737MAX (in units) | 0 | |||||
Firm - 738MAX (in units) | 0 | |||||
Options - 737MAX (in units) | 0 | |||||
Total | 35 | |||||
2016 | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Firm - 737NG 700 (in units) | 31 | |||||
Firm - 737NG 800 (in units) | 0 | |||||
Options - 737NG (in units) | 11 | |||||
Additional - 700 A/C (in units) | 4 | |||||
Firm - 737MAX (in units) | 0 | |||||
Firm - 738MAX (in units) | 0 | |||||
Options - 737MAX (in units) | 0 | |||||
Total | 46 | |||||
2017 | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Firm - 737NG 700 (in units) | 15 | |||||
Firm - 737NG 800 (in units) | 0 | |||||
Options - 737NG (in units) | 12 | |||||
Additional - 700 A/C (in units) | 0 | |||||
Firm - 737MAX (in units) | 0 | |||||
Firm - 738MAX (in units) | 14 | |||||
Options - 737MAX (in units) | 0 | |||||
Total | 41 | |||||
2018 | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Firm - 737NG 700 (in units) | 10 | |||||
Firm - 737NG 800 (in units) | 0 | |||||
Options - 737NG (in units) | 12 | |||||
Additional - 700 A/C (in units) | 0 | |||||
Firm - 737MAX (in units) | 0 | |||||
Firm - 738MAX (in units) | 13 | |||||
Options - 737MAX (in units) | 0 | |||||
Total | 35 | |||||
2019 | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Firm - 737NG 700 (in units) | 0 | |||||
Firm - 737NG 800 (in units) | 0 | |||||
Options - 737NG (in units) | 0 | |||||
Additional - 700 A/C (in units) | 0 | |||||
Firm - 737MAX (in units) | 15 | |||||
Firm - 738MAX (in units) | 10 | |||||
Options - 737MAX (in units) | 0 | |||||
Total | 25 | |||||
2020 | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Firm - 737NG 700 (in units) | 0 | |||||
Firm - 737NG 800 (in units) | 0 | |||||
Options - 737NG (in units) | 0 | |||||
Additional - 700 A/C (in units) | 0 | |||||
Firm - 737MAX (in units) | 14 | |||||
Firm - 738MAX (in units) | 22 | |||||
Options - 737MAX (in units) | 0 | |||||
Total | 36 | |||||
2021 | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Firm - 737NG 700 (in units) | 0 | |||||
Firm - 737NG 800 (in units) | 0 | |||||
Options - 737NG (in units) | 0 | |||||
Additional - 700 A/C (in units) | 0 | |||||
Firm - 737MAX (in units) | 1 | |||||
Firm - 738MAX (in units) | 33 | |||||
Options - 737MAX (in units) | 18 | |||||
Total | 52 | |||||
2022 | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Firm - 737NG 700 (in units) | 0 | |||||
Firm - 737NG 800 (in units) | 0 | |||||
Options - 737NG (in units) | 0 | |||||
Additional - 700 A/C (in units) | 0 | |||||
Firm - 737MAX (in units) | 0 | |||||
Firm - 738MAX (in units) | 30 | |||||
Options - 737MAX (in units) | 19 | |||||
Total | 49 | |||||
2023 | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Firm - 737NG 700 (in units) | 0 | |||||
Firm - 737NG 800 (in units) | 0 | |||||
Options - 737NG (in units) | 0 | |||||
Additional - 700 A/C (in units) | 0 | |||||
Firm - 737MAX (in units) | 0 | |||||
Firm - 738MAX (in units) | 24 | |||||
Options - 737MAX (in units) | 23 | |||||
Total | 47 | |||||
2024 | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Firm - 737NG 700 (in units) | 0 | |||||
Firm - 737NG 800 (in units) | 0 | |||||
Options - 737NG (in units) | 0 | |||||
Additional - 700 A/C (in units) | 0 | |||||
Firm - 737MAX (in units) | 0 | |||||
Firm - 738MAX (in units) | 24 | |||||
Options - 737MAX (in units) | 23 | |||||
Total | 47 | |||||
2025 | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Firm - 737NG 700 (in units) | 0 | |||||
Firm - 737NG 800 (in units) | 0 | |||||
Options - 737NG (in units) | 0 | |||||
Additional - 700 A/C (in units) | 0 | |||||
Firm - 737MAX (in units) | 0 | |||||
Firm - 738MAX (in units) | 0 | |||||
Options - 737MAX (in units) | 36 | |||||
Total | 36 | |||||
2026 | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Firm - 737NG 700 (in units) | 0 | |||||
Firm - 737NG 800 (in units) | 0 | |||||
Options - 737NG (in units) | 0 | |||||
Additional - 700 A/C (in units) | 0 | |||||
Firm - 737MAX (in units) | 0 | |||||
Firm - 738MAX (in units) | 0 | |||||
Options - 737MAX (in units) | 36 | |||||
Total | 36 | |||||
2027 | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Firm - 737NG 700 (in units) | 0 | |||||
Firm - 737NG 800 (in units) | 0 | |||||
Options - 737NG (in units) | 0 | |||||
Additional - 700 A/C (in units) | 0 | |||||
Firm - 737MAX (in units) | 0 | |||||
Firm - 738MAX (in units) | 0 | |||||
Options - 737MAX (in units) | 36 | |||||
Total | 36 | |||||
LAX | ||||||
Airport Project [Line Items] | ||||||
Expected total airport modernization project cost | 525,000,000 | |||||
Assets constructed for others | 52,000,000 | |||||
FLL | ||||||
Airport Project [Line Items] | ||||||
Expected total airport modernization project cost | 295,000,000 | |||||
DAL | ||||||
Airport Project [Line Items] | ||||||
Expected total airport modernization project cost | 519,000,000 | |||||
Municipal bonds issued | 146,000,000 | 310,000,000 | ||||
Number of gates with rights to occupy after completion | 16 | |||||
Assets constructed for others | 504,000,000 | |||||
Airport construction obligation | 501,000,000 | |||||
Depreciation and amortization | 20,000,000 | |||||
Property, Plant, and Equipment Useful Life | 27 years | |||||
Property Plant And Equipment Percentage Cost To Residual Value Minimum | 17.00% | |||||
HOU | ||||||
Airport Project [Line Items] | ||||||
Expected total airport modernization project cost | 156,000,000 | |||||
Assets constructed for others | $64,000,000 | |||||
B-737-800 | ||||||
Airport Project [Line Items] | ||||||
Number of Aircrafts Purchased | 33 | |||||
B-737-700 | ||||||
Airport Project [Line Items] | ||||||
Number of Aircrafts Purchased | 11 | |||||
Number of aircrafts leased | 11 | |||||
B737-300 | ||||||
Airport Project [Line Items] | ||||||
Number of aircrafts retired from service | 3 | |||||
B737-500 | ||||||
Airport Project [Line Items] | ||||||
Number of aircrafts retired from service | 2 | |||||
B-717-200 | ||||||
Airport Project [Line Items] | ||||||
Number of aircrafts removed from active service | 66 | |||||
[1] | The Company has flexibility to substitute 737-800s in lieu of 737-700 firm orders. | |||||
[2] | The Company has flexibility to substitute MAX 7 in lieu of MAX 8 firm orders beginning in 2019. |
Supplemental_Financial_Informa1
Supplemental Financial Information - Other Assets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Other Assets [Abstract] | ||
Derivative contracts | $13 | $145 |
Intangible assets | 363 | 166 |
Non-current investments | 35 | 44 |
Other | 123 | 175 |
Other assets | $534 | $530 |
Supplemental_Financial_Informa2
Supplemental Financial Information - Accounts Payable (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Accounts Payable [Abstract] | ||
Accounts payable trade | $123 | $189 |
Salaries payable | 160 | 156 |
Taxes payable | 163 | 146 |
Aircraft maintenance payable | 314 | 331 |
Fuel payable | 85 | 102 |
Other payable | 358 | 323 |
Accounts payable | $1,203 | $1,247 |
Supplemental_Financial_Informa3
Supplemental Financial Information - Accrued Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Supplemental Financial Data [Line Items] | ||||
Profitsharing and savings plans | $374 | $244 | ||
Aircraft and other lease related obligations | 159 | 173 | ||
Vacation pay | 292 | 278 | ||
Health | 84 | 73 | ||
Workers compensation | 165 | 161 | ||
Property and other taxes | 81 | 65 | ||
Other | 236 | 223 | ||
Accrued liabilities | 1,565 | 1,229 | ||
Fuel derivatives | Accrued Liabilities | ||||
Supplemental Financial Data [Line Items] | ||||
Derivative Contracts | $174 | [1] | $12 | [1] |
[1] | The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the Consolidated Balance Sheet in Note 5. |
Supplemental_Financial_Informa4
Supplemental Financial Information - Other Non-Current Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Other Liabilities, Noncurrent [Abstract] | ||||
Postretirement obligation | $169 | $138 | ||
Non-current lease-related obligations | 193 | 290 | ||
Other deferred compensation | 174 | 163 | ||
Deferred gains from sale and leaseback of aircraft | 53 | 65 | ||
Other | 44 | 70 | ||
Other non-current liabilities | 1,255 | 771 | ||
Other Noncurrent Liabilities | ||||
Other Liabilities, Noncurrent [Abstract] | ||||
Derivative contracts | 622 | |||
Other Noncurrent Liabilities | Interest Rate Swap | ||||
Other Liabilities, Noncurrent [Abstract] | ||||
Derivative contracts | $61 | [1] | $45 | [1] |
[1] | The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the Consolidated Balance Sheet in Note 5. |
Schedule_of_Longterm_Debt_Deta
Schedule of Long-term Debt (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2006 | Oct. 31, 2009 | Dec. 31, 2012 | Feb. 28, 2005 | Apr. 29, 2009 | Jul. 01, 2009 | 6-May-08 | Feb. 28, 1997 |
In Millions, unless otherwise specified | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total | $2,713 | $2,842 | ||||||||
Less current maturities | 258 | 629 | ||||||||
Less debt discount and issuance costs | 21 | 22 | ||||||||
Long-term debt less current maturities | 2,434 | 2,191 | ||||||||
Capital Lease Obligations | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total | 199 | 56 | ||||||||
5.25% Notes due 2014 | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total | 0 | 357 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.25% | |||||||||
5.75% Notes due 2016 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.75% | |||||||||
5.75% Notes due 2016 | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total | 313 | 320 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.75% | |||||||||
5.25% Convertible Senior Notes due 2016 | AirTran Airways | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.25% | |||||||||
5.25% Convertible Senior Notes due 2016 | Convertible Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.25% | 5.25% | 5.25% | |||||||
5.25% Convertible Senior Notes due 2016 | Convertible Debt | AirTran Airways | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total | 113 | 115 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.25% | |||||||||
5.125% Notes due 2017 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.13% | |||||||||
5.125% Notes due 2017 | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total | 316 | 322 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.13% | |||||||||
Fixed-rate 717 Aircraft Notes payable through 2017 - 10.37% | Enhanced Equipment Trust Certificate | AirTran Airways | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total | 0 | 41 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 10.37% | |||||||||
French Credit Agreements due 2018 - 1.06% | Notes Payable to Banks | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total | 36 | 46 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 1.06% | |||||||||
Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02% | Notes Payable to Banks | AirTran Airways | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total | 24 | 30 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 7.02% | |||||||||
2.75% Unsecured Senior Notes Due 2019 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 2.75% | |||||||||
2.75% Unsecured Senior Notes Due 2019 | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total | 300 | 0 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 2.75% | |||||||||
Term Loan Agreement due 2019 - 6.315% | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.32% | |||||||||
Term Loan Agreement due 2019 - 6.315% | Notes Payable to Banks | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total | 178 | 210 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.32% | |||||||||
Term Loan Agreement due 2019 - 6.84% | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.84% | |||||||||
Term Loan Agreement due 2019 - 6.84% | Notes Payable to Banks | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total | 73 | 85 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.84% | |||||||||
Term Loan Agreement due 2020 - 5.223% | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.22% | |||||||||
Term Loan Agreement due 2020 - 5.223% | Notes Payable to Banks | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total | 372 | 413 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.22% | |||||||||
Floating-rate 737 Aircraft Notes payable through 2020 | Notes Payable to Banks | AirTran Airways | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total | 300 | 340 | ||||||||
Pass Through Certificates due 2022 - 6.24% | Enhanced Equipment Trust Certificate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total | 355 | 371 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.24% | |||||||||
7.375% Debentures due 2027 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 7.38% | |||||||||
7.375% Debentures due 2027 | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total | $134 | $136 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 7.38% | 7.38% |
Longterm_Debt_Details
Long-term Debt (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | |||||||
Dec. 31, 2014 | Oct. 31, 2009 | Dec. 31, 2013 | Apr. 29, 2009 | 6-May-08 | Dec. 31, 2004 | Feb. 28, 1997 | Jul. 01, 2009 | Oct. 03, 2007 | Dec. 31, 2006 | Feb. 28, 2005 | Sep. 30, 2004 | Jun. 30, 2014 | |
Loans | Agreements | Mortgages | Mortgages | ||||||||||
Mortgages | Mortgages | ||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Letters of Credit Outstanding Amount | 440,000,000 | ||||||||||||
Net book value of assets pledged as collateral for the Company's secured borrowings, primarily aircraft and engines | 2,000,000,000 | ||||||||||||
Maximum additional number of assets pledged as collateral in case obligations related to fuel derivatives exceed certain thresholds | 81 | ||||||||||||
Net book value of additional assets pledged as collateral in case obligations related to fuel derivatives exceed certain thresholds | 2,000,000,000 | ||||||||||||
Long-term Debt, by Maturity [Abstract] | |||||||||||||
2015 | 182,000,000 | ||||||||||||
2016 | 610,000,000 | ||||||||||||
2017 | 520,000,000 | ||||||||||||
2018 | 264,000,000 | ||||||||||||
2019 | 514,000,000 | ||||||||||||
Thereafter | 551,000,000 | ||||||||||||
AirTran Airways | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of mortgages on secured aircraft | 22 | ||||||||||||
AirTran Airways | Interest rate derivatives | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Notional amount | 243,000,000 | ||||||||||||
AirTran Airways | Maximum | Interest rate derivatives | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.44% | ||||||||||||
Floating-rate 737 Aircraft Notes payable through 2020 | AirTran Airways | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of mortgages on secured aircraft | 19 | ||||||||||||
Number of loans prepaid during period | 8 | ||||||||||||
Weighted average interest rate | 1.66% | ||||||||||||
Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02% | AirTran Airways | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Weighted average interest rate | 7.02% | ||||||||||||
5.25% Convertible Senior Notes due 2016 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Conversion ratio | 53.7747 | ||||||||||||
Conversion price | $615.16 | ||||||||||||
5.25% Convertible Senior Notes due 2016 | AirTran Airways | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face amount of debt | 115,000,000 | ||||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.25% | ||||||||||||
Conversion ratio | 167.5224 | ||||||||||||
Extinguishment of debt amount | 5,000,000 | ||||||||||||
Repurchase price percentage | 100.00% | ||||||||||||
Conversion option, amount | 35,000,000 | ||||||||||||
Unamortized premium | 10,000,000 | ||||||||||||
5.25% Convertible Senior Notes due 2016 | Southwest Airlines | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Cash set aside for conversion | 68,000,000 | ||||||||||||
2.75% Unsecured Senior Notes Due 2019 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face amount of debt | 300,000,000 | ||||||||||||
Interest rate stated in the debt agreement (in hundredths) | 2.75% | ||||||||||||
Term Loan Agreement due 2019 - 6.84% | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of mortgages on secured aircraft | 5 | ||||||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.84% | ||||||||||||
Term Loan Agreement due 2019 - 6.84% | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face amount of debt | 124,000,000 | ||||||||||||
Term Loan Agreement due 2019 - 6.315% | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of mortgages on secured aircraft | 14 | ||||||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.32% | ||||||||||||
Term Loan Agreement due 2019 - 6.315% | LIBOR | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Spread on variable rate | 3.30% | ||||||||||||
Term Loan Agreement due 2019 - 6.315% | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face amount of debt | 332,000,000 | ||||||||||||
Term Loan Agreement due 2020 - 5.223% | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of mortgages on secured aircraft | 21 | ||||||||||||
Face amount of debt | 600,000,000 | ||||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.22% | ||||||||||||
Term Loan Agreement due 2020 - 5.223% | LIBOR | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Spread on variable rate | 0.95% | ||||||||||||
Pass Through Certificates due 2022 - 6.24% | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of mortgages on secured aircraft | 16 | ||||||||||||
Face amount of debt | 500,000,000 | ||||||||||||
Pass Through Certificates due 2022 - 6.24% | Interest rate derivatives | Cash Flow Hedging | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Notional amount | 20,000,000 | ||||||||||||
Pass Through Certificates Series A | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face amount of debt | 412,000,000 | ||||||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.15% | ||||||||||||
Pass Through Certificates Series B | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face amount of debt | 88,000,000 | ||||||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.65% | ||||||||||||
5.75% Notes due 2016 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face amount of debt | 300,000,000 | ||||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.75% | ||||||||||||
5.125% Notes due 2017 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face amount of debt | 300,000,000 | ||||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.13% | ||||||||||||
French Credit Agreements due 2018 - 1.06% | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of mortgages on secured aircraft | 4 | ||||||||||||
Face amount of debt | 112,000,000 | ||||||||||||
Number of identical floating rate financing agreements entered into concurrently with French banking partnerships | 4 | ||||||||||||
Term | 13 years 0 months 0 days | ||||||||||||
French Credit Agreements due 2018 - 1.06% | LIBOR | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Spread on variable rate | -45.00% | ||||||||||||
5.25% Notes due 2014 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face amount of debt | 350,000,000 | ||||||||||||
7.375% Debentures due 2027 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face amount of debt | 100,000,000 | ||||||||||||
Interest rate stated in the debt agreement (in hundredths) | 7.38% | ||||||||||||
7.375% Debentures due 2027 | Treasury Rate | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Spread on variable rate | 20.00% | ||||||||||||
Enhanced Equipment Trust Certificate | Fixed-rate 717 Aircraft Notes payable through 2017 - 10.37% | AirTran Airways | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Long-term Debt, Prepayment | 7,000,000 | 35,000,000 | |||||||||||
Make Whole Penalty on Debt Extinguishment | 6,000,000 | ||||||||||||
Interest rate stated in the debt agreement (in hundredths) | 10.37% | ||||||||||||
Unamortized premium | $5,000,000 | ||||||||||||
Enhanced Equipment Trust Certificate | Pass Through Certificates due 2022 - 6.24% | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.24% |
Leases_Details
Leases (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | |||||||
Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Jun. 30, 2014 | Sep. 30, 2012 | Jul. 09, 2012 | |||
CapitalLeases | CapitalLeases | CapitalLeases | aircraft | aircraft | ||||||
aircraft | aircraft | aircraft | ||||||||
Capital Leases, Balance Sheet, Assets by Major Class, Net [Abstract] | ||||||||||
Flight equipment | $69,000,000 | $214,000,000 | $69,000,000 | $214,000,000 | ||||||
Less: accumulated amortization | 12,000,000 | 22,000,000 | 12,000,000 | 22,000,000 | ||||||
Total | 57,000,000 | 192,000,000 | 57,000,000 | 192,000,000 | ||||||
Capital leases | ||||||||||
2015 | 33,000,000 | 33,000,000 | ||||||||
2016 | 42,000,000 | 42,000,000 | ||||||||
2017 | 45,000,000 | 45,000,000 | ||||||||
2018 | 44,000,000 | 44,000,000 | ||||||||
2019 | 43,000,000 | 43,000,000 | ||||||||
Thereafter | 202,000,000 | 202,000,000 | ||||||||
Total minimum lease payments | 409,000,000 | 409,000,000 | ||||||||
Less amount representing interest | 75,000,000 | 75,000,000 | ||||||||
Present value of minimum lease payments | 334,000,000 | 334,000,000 | ||||||||
Less current portion | 23,000,000 | 23,000,000 | ||||||||
Long-term portion | 311,000,000 | 311,000,000 | ||||||||
Facility Operating leases | ||||||||||
2015 | 753,000,000 | 753,000,000 | ||||||||
2016 | 715,000,000 | 715,000,000 | ||||||||
2017 | 671,000,000 | 671,000,000 | ||||||||
2018 | 573,000,000 | 573,000,000 | ||||||||
2019 | 502,000,000 | 502,000,000 | ||||||||
Thereafter | 1,802,000,000 | 1,802,000,000 | ||||||||
Total minimum lease payments | 5,016,000,000 | 5,016,000,000 | ||||||||
Subleases | ||||||||||
2015 | -93,000,000 | -93,000,000 | ||||||||
2016 | -103,000,000 | -103,000,000 | ||||||||
2017 | -103,000,000 | -103,000,000 | ||||||||
2018 | -102,000,000 | -102,000,000 | ||||||||
2019 | -97,000,000 | -97,000,000 | ||||||||
Thereafter | -144,000,000 | -144,000,000 | ||||||||
Total minimum lease payments | -642,000,000 | -642,000,000 | ||||||||
Operating leases, net | ||||||||||
2015 | 684,000,000 | 684,000,000 | ||||||||
2016 | 636,000,000 | 636,000,000 | ||||||||
2017 | 592,000,000 | 592,000,000 | ||||||||
2018 | 496,000,000 | 496,000,000 | ||||||||
2019 | 430,000,000 | 430,000,000 | ||||||||
Thereafter | 2,317,000,000 | 2,317,000,000 | ||||||||
Total minimum lease payments | 5,155,000,000 | 5,155,000,000 | ||||||||
Capital Leased Assets [Line Items] | ||||||||||
Number of capital leased assets | 4 | 16 | 4 | 16 | ||||||
Rental expense for operating leases | 931,000,000 | 997,000,000 | 943,000,000 | |||||||
Number of operating leased assets | 174 | 174 | ||||||||
Number of aircraft sold in sale and leaseback transaction | 2 | 2 | ||||||||
Sales Leaseback Transaction Gross Proceeds | 12,000,000 | |||||||||
Leaseback Period | 11 years | |||||||||
Number of aircraft expected to be converted to sublease per month | 3 | 3 | ||||||||
Minimum | ||||||||||
Capital Leased Assets [Line Items] | ||||||||||
Renewal term | 1 year | |||||||||
Maximum | ||||||||||
Capital Leased Assets [Line Items] | ||||||||||
Renewal term | 5 years | |||||||||
B-717-200 | ||||||||||
Capital Leased Assets [Line Items] | ||||||||||
Number of capital leased assets | 2 | |||||||||
Number of operating leased assets | 76 | |||||||||
Number of aircrafts subleased | 88 | |||||||||
Number of aircraft delivered to sublessee | 52 | 52 | ||||||||
Number of owned assets | 10 | |||||||||
Lease terms for owned aircraft | 7 years | |||||||||
Contingent rental payment due | 0 | 0 | ||||||||
Residual value of leased properties | 0 | 0 | ||||||||
Estimated Loss On Sublease | 137,000,000 | |||||||||
Sublease transaction costs | 86,000,000 | [1] | 12,000,000 | [1] | ||||||
Sublease Obligations | 122,000,000 | 63,000,000 | 122,000,000 | 128,000,000 | 63,000,000 | |||||
Interest expense related to accretion | -5,000,000 | -6,000,000 | ||||||||
Additional Estimated Loss on Sublease | 22,000,000 | 22,000,000 | ||||||||
Grounding Loss on Sublease | 9,000,000 | |||||||||
B-717-200 | Minimum | ||||||||||
Capital Leased Assets [Line Items] | ||||||||||
Sublease terms | 3 years | |||||||||
B-717-200 | Maximum | ||||||||||
Capital Leased Assets [Line Items] | ||||||||||
Sublease terms | 9 years | |||||||||
Love Field Airport | ||||||||||
Facility Operating leases | ||||||||||
2015 | 24,000,000 | 24,000,000 | ||||||||
2016 | 24,000,000 | 24,000,000 | ||||||||
2017 | 24,000,000 | 24,000,000 | ||||||||
2018 | 25,000,000 | 25,000,000 | ||||||||
2019 | 25,000,000 | 25,000,000 | ||||||||
Thereafter | 659,000,000 | 659,000,000 | ||||||||
Total minimum lease payments | $781,000,000 | $781,000,000 | ||||||||
[1] | Includes lease conversion cost payments |
LEASES_Sublease_Table_Details
LEASES Sublease Table (Details) (B-717-200, USD $) | 3 Months Ended | 12 Months Ended | ||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
B-717-200 | ||||||
B717 Sublease Liability [Line Items] | ||||||
Sublease Obligations | $63 | $122 | $128 | |||
Interest Expense, Accretion | 5 | 6 | ||||
Sublease Transaction Costs | -86 | [1] | -12 | [1] | ||
Additional Estimated Loss on Sublease | $22 | $22 | ||||
[1] | Includes lease conversion cost payments |
Common_Stock_Details
Common Stock (Details) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Equity [Abstract] | |
Common stock reserved for issuance pursuant to Employee stock benefit plans (in shares) | 47 |
Common stock reserved for issuance and not granted pursuant to Employee stock benefit plans (in shares) | 20 |
Stock_Plans_Details
Stock Plans (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Employee service share based compensation aggregate disclosures [Abstract] | ||||
Share based compensation cost | $21,000,000 | $18,000,000 | $16,000,000 | |
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | 0 | |||
Total unrecognized compensation cost related to share-based compensation arrangements | 33,000,000 | |||
Weighted average period of time over which unrecognized compensation cost is to be recognized (years) | 1 year 1 month 12 days | |||
The remaining number of RSU's or stock options that may be issued (in shares) | 20,000,000 | |||
Additional disclosures for all plans for the period [Abstract] | ||||
Aggregate intrinsic value of options exercised for all plans during the period | 75,000,000 | 22,000,000 | 1,000,000 | |
Total fair value of shares vested during the period | 15,000,000 | 16,000,000 | 13,000,000 | |
Employee stock purchase plan [Abstract] | ||||
The remaining balance of shares originally authorized for issue under the employee stock purchase plan (in shares) | 11,000,000 | |||
The percentage of market value at which shares may be issued to participating employees (in hundredths) | 90.00% | |||
The number of shares issued to participants under the plan during the period | 792,000 | 1,500,000 | 2,200,000 | |
The weighted average fair value of each purchase right under the employee stock purchase plan (in dollars per share) | $23.17 | $12.03 | $8.01 | |
The discount percentage off the market value for the employee stock purchase plan (in hundredths) | 10.00% | |||
The aggregate cost of the discount from the market value on shares issued to employees at the end of each monthly purchase period | 2.68 | 1.34 | 0.89 | |
Three Year vesting | ||||
Employee service share based compensation aggregate disclosures [Abstract] | ||||
Vesting periods for plans | 3 years 0 months 0 days | |||
Five Year vesting | ||||
Employee service share based compensation aggregate disclosures [Abstract] | ||||
Vesting periods for plans | 5 years 0 months 0 days | |||
Ten Year vesting | ||||
Employee service share based compensation aggregate disclosures [Abstract] | ||||
Vesting periods for plans | 10 years 0 months 0 days | |||
Board of Directors | ||||
Employee service share based compensation aggregate disclosures [Abstract] | ||||
Non-option equity instruments granted (in shares) | 36,000 | 63,000 | 82,000 | |
Weighted average price of non-option equity instruments granted | $24.91 | $14.34 | $8.21 | |
RSUs | ||||
Employee service share based compensation aggregate disclosures [Abstract] | ||||
Vesting periods for plans | 3 years | |||
The remaining number of RSU's or stock options that may be issued (in shares) | 10,000,000 | |||
Units (000) | ||||
Outstanding RSU's - beginning balance (in shares) | 2,584,000 | 2,876,000 | 1,640,000 | |
Granted (in shares) | 834,000 | [1] | 1,139,000 | 1,939,000 |
Vested (in shares) | -1,239,000 | -1,263,000 | -644,000 | |
Surrendered (in shares) | -102,000 | -168,000 | -59,000 | |
Outstanding RSU's - ending balance (in shares) | 2,077,000 | 2,584,000 | 2,876,000 | |
Wtd. Average Fair Value | ||||
Weighted average grant date fair value RSU's - beginning balance (in dollars per share) | $11.38 | $9.57 | $12.27 | |
Weighted average grant date fair value RSU's - granted (in dollars per share) | $24.93 | $14.34 | $8.21 | |
Weighted average grant date fair value RSU's - vested (in dollars per share) | $11.05 | $10.24 | $12.27 | |
Weighted average grant date fair value RSU's - surrendered (in dollars per share) | $13.18 | $9.11 | $10.54 | |
Weighted average grant date fair value RSU's - period end (in dollars per share) | $16.92 | $11.38 | $9.57 | |
Performance Shares | ||||
Units (000) | ||||
Granted (in shares) | 198,000 | |||
Stock Options | ||||
Options (000) | ||||
Outstanding - beginning balance (in shares) | 9,161,000 | 18,910,000 | 47,324,000 | |
Granted (in shares) | 0 | 0 | 6,000 | |
Exercised (in shares) | -6,636,000 | -6,633,000 | -573,000 | |
Surrendered (in shares) | -48,000 | -3,116,000 | -27,847,000 | |
Outstanding - ending balance (in shares) | 2,477,000 | 9,161,000 | 18,910,000 | |
Wtd. average exercise price | ||||
Weighted average exercise price - beginning balance (in dollars per share) | $14.58 | $14.19 | $14.51 | |
Weighted average exercise price - granted (in dollars per share) | $0 | $0 | $9 | |
Weighted average exercise price - exercised | $14.36 | $13.31 | $8 | |
Weighted average exercise price - surrendered (in dollars per share) | $15.74 | $14.94 | $14.85 | |
Weighted average exercise price - ending balance (in dollars per share) | $15.17 | $14.58 | $14.19 | |
Weighted average remaining contractual term - period end (in years) | 1 year 7 months 13 days | |||
Aggregate intrinsic value - outstanding - period end | 67,000,000 | |||
Stock options, vested and expected to vest [Abstract] | ||||
Vested or expected to vest, outstanding number (in shares) | 2,473,000 | |||
Exercisable, outstanding number (in shares) | 2,308,000 | |||
Weighted average exercise price - vested or expected to vest (in dollars per share) | $15.16 | |||
Weighted average exercise price - exercisable (in dollars per share) | $15.05 | |||
Weighted average remaining contractual term - vested or expected to vest - period end (in years) | 1 year 7 months 16 days | |||
Weighted average remaining contractual term - exercisable - period end (in years) | 1 year 8 months 1 day | |||
Aggregate intrinsic value - vested or expected to vest - period end | 67,000,000 | |||
Aggregate intrinsic value - exercisable - period end | $63,000,000 | |||
Other Employee Plans | ||||
Employee service share based compensation aggregate disclosures [Abstract] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |||
Minimum | Performance Shares | ||||
Employee service share based compensation aggregate disclosures [Abstract] | ||||
Percentage of PBRSUs to be granted | 0.00% | |||
Performance Target | 12.00% | |||
Minimum | Collective Bargaining Plans | ||||
Employee service share based compensation aggregate disclosures [Abstract] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 6 years | |||
Maximum | Performance Shares | ||||
Employee service share based compensation aggregate disclosures [Abstract] | ||||
Percentage of PBRSUs to be granted | 200.00% | |||
Performance Target | 20.00% | |||
Maximum | Collective Bargaining Plans | ||||
Employee service share based compensation aggregate disclosures [Abstract] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 12 years | |||
[1] | Includes 198 thousand shares of PBRSUs |
Financial_Derivative_Instrumen1
Financial Derivative Instruments Narrative (Details) (USD $) | 12 Months Ended | 6 Months Ended | |||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | 6-May-08 | Apr. 29, 2009 | Feb. 28, 1997 | Dec. 31, 2006 | ||||
Derivative [Line Items] | |||||||||||
Percent of fuel consumption hedged | 34.00% | ||||||||||
Premiums paid for fuel derivative contracts | $62,000,000 | $60,000,000 | $36,000,000 | ||||||||
Current Unrealized Net Gains in OCI | 219,000,000 | ||||||||||
Proceeds from termination of interest rate derivative instrument | 0 | 0 | 38,000,000 | ||||||||
Maximum sum of derivatives of counterparty to be included in other (less than $20 million) | 25,000,000 | ||||||||||
Cash collateral provided as a percentage of derivative contract value (in hundredths) | 100.00% | ||||||||||
Derivative Asset, Fair Value, Gross Asset | 1,360,000,000 | [1] | 503,000,000 | [1] | 503,000,000 | [1] | |||||
Derivative Liability, Fair Value, Gross Liability | 2,409,000,000 | [1] | 380,000,000 | [1] | 380,000,000 | [1] | |||||
Derivative, Gain on Settlement | 56,000,000 | ||||||||||
Amount paid for purchases and sales of offsetting derivative instruments | 217,000,000 | ||||||||||
Term Loan Agreement due 2020 - 5.223% | |||||||||||
Derivative [Line Items] | |||||||||||
Face amount of debt | 600,000,000 | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.22% | ||||||||||
Term Loan Agreement due 2019 - 6.315% | |||||||||||
Derivative [Line Items] | |||||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.32% | ||||||||||
Term Loan Agreement due 2019 - 6.315% | Maximum | |||||||||||
Derivative [Line Items] | |||||||||||
Face amount of debt | 332,000,000 | ||||||||||
7.375% Debentures due 2027 | |||||||||||
Derivative [Line Items] | |||||||||||
Face amount of debt | 100,000,000 | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 7.38% | ||||||||||
2.75% Unsecured Senior Notes Due 2019 | |||||||||||
Derivative [Line Items] | |||||||||||
Face amount of debt | 300,000,000 | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 2.75% | ||||||||||
5.75% Notes due 2016 | |||||||||||
Derivative [Line Items] | |||||||||||
Face amount of debt | 300,000,000 | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.75% | ||||||||||
Notes Payable to Banks | Term Loan Agreement due 2020 - 5.223% | |||||||||||
Derivative [Line Items] | |||||||||||
Face amount of debt | 600,000,000 | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.22% | ||||||||||
Notes Payable to Banks | Term Loan Agreement due 2019 - 6.315% | |||||||||||
Derivative [Line Items] | |||||||||||
Face amount of debt | 332,000,000 | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.32% | ||||||||||
Unsecured Debt | 7.375% Debentures due 2027 | |||||||||||
Derivative [Line Items] | |||||||||||
Face amount of debt | 100,000,000 | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 7.38% | 7.38% | 7.38% | ||||||||
Unsecured Debt | 2.75% Unsecured Senior Notes Due 2019 | |||||||||||
Derivative [Line Items] | |||||||||||
Face amount of debt | 300,000,000 | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 2.75% | ||||||||||
Average Floating Rate | 1.23% | ||||||||||
Unsecured Debt | 5.75% Notes due 2016 | |||||||||||
Derivative [Line Items] | |||||||||||
Face amount of debt | 300,000,000 | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.75% | ||||||||||
Average Floating Rate | 2.51% | ||||||||||
Fuel derivatives | |||||||||||
Derivative [Line Items] | |||||||||||
Gain (Loss) On Derivative Due To Loss Of Hedge Accounting | 45,000,000 | -15,000,000 | |||||||||
Total collateral already posted aggregate fair value | 266,000,000 | 0 | 0 | ||||||||
Interest rate derivatives | AirTran Airways | |||||||||||
Derivative [Line Items] | |||||||||||
Notional amount | 243,000,000 | ||||||||||
Interest rate derivatives | AirTran Airways | Minimum | |||||||||||
Derivative [Line Items] | |||||||||||
Interest rate stated in the debt agreement (in hundredths) | 4.35% | ||||||||||
Interest rate derivatives | AirTran Airways | Maximum | |||||||||||
Derivative [Line Items] | |||||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.44% | ||||||||||
Designated as Hedging Instrument | |||||||||||
Derivative [Line Items] | |||||||||||
Derivative Asset, Fair Value, Gross Asset | 13,000,000 | [1] | 303,000,000 | [1] | 303,000,000 | [1] | |||||
Derivative Liability, Fair Value, Gross Liability | 704,000,000 | [1] | 78,000,000 | [1] | 78,000,000 | [1] | |||||
Other Assets | Designated as Hedging Instrument | Fuel derivatives | |||||||||||
Derivative [Line Items] | |||||||||||
Derivative Asset, Fair Value, Gross Asset | 0 | [1] | 209,000,000 | [1] | 209,000,000 | [1] | |||||
Derivative Liability, Fair Value, Gross Liability | 0 | [1] | 1,000,000 | [1] | 1,000,000 | [1] | |||||
Other Assets | Designated as Hedging Instrument | Interest rate derivatives | |||||||||||
Derivative [Line Items] | |||||||||||
Derivative Asset, Fair Value, Gross Asset | 13,000,000 | [1] | 20,000,000 | [1] | 20,000,000 | [1] | |||||
Derivative Liability, Fair Value, Gross Liability | 0 | [1] | 0 | [1] | 0 | [1] | |||||
Other Liabilities | Designated as Hedging Instrument | Interest rate derivatives | |||||||||||
Derivative [Line Items] | |||||||||||
Derivative Liability, Fair Value, Gross Liability | $61,000,000 | ||||||||||
[1] | Represents the position of each trade before consideration of offsetting positions with each counterparty and does not include the impact of cash collateral deposits provided to or received from counterparties. See discussion of credit risk and collateral following in this Note. |
Financial_Derivative_Instrumen2
Financial Derivative Instruments - Fuel Hedging (Details) | Dec. 31, 2014 | |
gal | ||
2015 | ||
Volume of Fuel Hedging [Line Items] | ||
Fuel Hedged (in gallons) | 0 | [1] |
2016 | ||
Volume of Fuel Hedging [Line Items] | ||
Fuel Hedged (in gallons) | 885,000,000 | [2] |
2017 | ||
Volume of Fuel Hedging [Line Items] | ||
Fuel Hedged (in gallons) | 757,000,000 | [2] |
2018 | ||
Volume of Fuel Hedging [Line Items] | ||
Fuel Hedged (in gallons) | 0 | [1] |
[1] | In response to the precipitous decline in oil and jet fuel prices during the second half of 2014, the Company took action to offset its 2015 and 2018 fuel derivative portfolios and is now effectively unhedged at current price levels. While the Company still holds derivative contracts as of December 31, 2014, that will settle during 2015 and 2018, the majority of the losses associated with those contracts are substantially locked in.B However, if market prices were to increase or decrease significantly related to the 2015 positions prior to these contracts settling, the losses incurred at settlement could be slightly lower or higher than currently expected amounts during that period. | |
[2] | Due to the types of derivatives utilized by the Company and different price levels of those contracts, these volumes represent the maximum economic hedge in place and may vary significantly as market prices fluctuate. |
Financial_Derivative_Instrumen3
Financial Derivative Instruments - Fair Values by Balance Sheet Location (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Asset, Fair Value, Gross Asset | $1,360 | [1] | $503 | [1] |
Derivative Liability, Fair Value, Gross Liability | 2,409 | [1] | 380 | [1] |
Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Asset, Fair Value, Gross Asset | 13 | [1] | 303 | [1] |
Derivative Liability, Fair Value, Gross Liability | 704 | [1] | 78 | [1] |
Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Asset, Fair Value, Gross Asset | 1,347 | [1] | 200 | [1] |
Derivative Liability, Fair Value, Gross Liability | 1,705 | [1] | 302 | [1] |
Fuel derivatives | Accrued Liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Collateral Already Posted, Aggregate Fair Value | 68 | 0 | ||
Due To Third Parties For Settled Fuel Contracts | 16 | 0 | ||
Fuel derivatives | Accounts And Other Receivables | ||||
Derivatives, Fair Value [Line Items] | ||||
Receivable from third parties for settled fuel contracts - current | 0 | 57 | ||
Fuel derivatives | Other Noncurrent Liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Collateral Already Posted, Aggregate Fair Value | 198 | 0 | ||
Fuel derivatives | Designated as Hedging Instrument | Prepaid expenses and other current assets | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Asset, Fair Value, Gross Asset | 0 | [1] | 74 | [1] |
Derivative Liability, Fair Value, Gross Liability | 0 | [1] | 0 | [1] |
Fuel derivatives | Designated as Hedging Instrument | Other Assets | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Asset, Fair Value, Gross Asset | 0 | [1] | 209 | [1] |
Derivative Liability, Fair Value, Gross Liability | 0 | [1] | 1 | [1] |
Fuel derivatives | Designated as Hedging Instrument | Other Noncurrent Liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Asset, Fair Value, Gross Asset | 0 | [1] | 0 | [1] |
Derivative Liability, Fair Value, Gross Liability | 643 | [1] | 0 | [1] |
Fuel derivatives | Not Designated as Hedging Instrument | Prepaid expenses and other current assets | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Asset, Fair Value, Gross Asset | 0 | [1] | 175 | [1] |
Derivative Liability, Fair Value, Gross Liability | 0 | [1] | 182 | [1] |
Fuel derivatives | Not Designated as Hedging Instrument | Other Assets | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Asset, Fair Value, Gross Asset | 0 | [1] | 16 | [1] |
Derivative Liability, Fair Value, Gross Liability | 0 | [1] | 99 | [1] |
Fuel derivatives | Not Designated as Hedging Instrument | Accrued Liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Asset, Fair Value, Gross Asset | 1,190 | [1] | 9 | [1] |
Derivative Liability, Fair Value, Gross Liability | 1,432 | [1] | 21 | [1] |
Fuel derivatives | Not Designated as Hedging Instrument | Other Noncurrent Liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Asset, Fair Value, Gross Asset | 157 | [1] | 0 | [1] |
Derivative Liability, Fair Value, Gross Liability | 273 | [1] | 0 | [1] |
Interest rate derivatives | Other Noncurrent Liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Collateral Already Posted, Aggregate Fair Value | 0 | 32 | ||
Interest rate derivatives | Designated as Hedging Instrument | Other Assets | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Asset, Fair Value, Gross Asset | 13 | [1] | 20 | [1] |
Derivative Liability, Fair Value, Gross Liability | 0 | [1] | 0 | [1] |
Interest rate derivatives | Designated as Hedging Instrument | Other Noncurrent Liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Asset, Fair Value, Gross Asset | 0 | [1] | 0 | [1] |
Derivative Liability, Fair Value, Gross Liability | 61 | [1] | 77 | [1] |
Interest rate derivatives | Designated as Hedging Instrument | Other Liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Liability, Fair Value, Gross Liability | $61 | |||
[1] | Represents the position of each trade before consideration of offsetting positions with each counterparty and does not include the impact of cash collateral deposits provided to or received from counterparties. See discussion of credit risk and collateral following in this Note. |
Financial_Derivative_Instrumen4
Financial Derivative Instruments - Offsetting of Derivative Assets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Offsetting Assets [Line Items] | ||||
Net amounts of assets presented in the Balance Sheet | $13 | $145 | ||
Fuel derivatives | Prepaid expenses and other current assets | ||||
Offsetting Assets [Line Items] | ||||
Gross amounts of recognized assets | 0 | 249 | ||
Gross amounts offset in the Balance Sheet | 0 | -182 | ||
Net amounts of assets presented in the Balance Sheet | 0 | 67 | ||
Fuel derivatives | Other Assets | ||||
Offsetting Assets [Line Items] | ||||
Gross amounts of recognized assets | 0 | 225 | ||
Gross amounts offset in the Balance Sheet | 0 | -100 | ||
Net amounts of assets presented in the Balance Sheet | 0 | [1] | 125 | [1] |
Fuel derivatives | Accrued Liabilities | ||||
Offsetting Assets [Line Items] | ||||
Gross amounts of recognized assets | 1,258 | 9 | ||
Gross amounts offset in the Balance Sheet | -1,258 | -9 | ||
Net amounts of assets presented in the Balance Sheet | 0 | [1] | 0 | [1] |
Fuel derivatives | Other Noncurrent Liabilities | ||||
Offsetting Assets [Line Items] | ||||
Gross amounts of recognized assets | 355 | 0 | ||
Gross amounts offset in the Balance Sheet | -355 | 0 | ||
Net amounts of assets presented in the Balance Sheet | 0 | [1] | 0 | [1] |
Interest rate derivatives | Other Assets | ||||
Offsetting Assets [Line Items] | ||||
Gross amounts of recognized assets | 13 | 20 | ||
Gross amounts offset in the Balance Sheet | 0 | 0 | ||
Net amounts of assets presented in the Balance Sheet | $13 | [1] | $20 | [1] |
[1] | The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the Consolidated Balance Sheet in Note 5. |
Financial_Derivative_Instrumen5
Financial Derivative Instruments - Offsetting of Derivative Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Other Noncurrent Liabilities | ||||
Offsetting Liabilities [Line Items] | ||||
Net amounts of liabilities presented in the Balance Sheet | $622 | |||
Fuel derivatives | Prepaid expenses and other current assets | ||||
Offsetting Liabilities [Line Items] | ||||
Gross amounts of recognized liabilities | 0 | 182 | ||
Gross amounts offset in the Balance Sheet | 0 | -182 | ||
Net amounts of liabilities presented in the Balance Sheet | 0 | 0 | ||
Fuel derivatives | Other Assets | ||||
Offsetting Liabilities [Line Items] | ||||
Gross amounts of recognized liabilities | 0 | 100 | ||
Gross amounts offset in the Balance Sheet | 0 | -100 | ||
Net amounts of liabilities presented in the Balance Sheet | 0 | [1] | 0 | [1] |
Fuel derivatives | Accrued Liabilities | ||||
Offsetting Liabilities [Line Items] | ||||
Gross amounts of recognized liabilities | 1,432 | 21 | ||
Gross amounts offset in the Balance Sheet | -1,258 | -9 | ||
Net amounts of liabilities presented in the Balance Sheet | 174 | [1] | 12 | [1] |
Fuel derivatives | Other Noncurrent Liabilities | ||||
Offsetting Liabilities [Line Items] | ||||
Gross amounts of recognized liabilities | 916 | 0 | ||
Gross amounts offset in the Balance Sheet | -355 | 0 | ||
Net amounts of liabilities presented in the Balance Sheet | 561 | [1] | 0 | [1] |
Interest rate derivatives | Other Noncurrent Liabilities | ||||
Offsetting Liabilities [Line Items] | ||||
Gross amounts of recognized liabilities | 61 | 77 | ||
Gross amounts offset in the Balance Sheet | 0 | -32 | ||
Net amounts of liabilities presented in the Balance Sheet | $61 | [1] | $45 | [1] |
[1] | The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the Consolidated Balance Sheet in Note 5. |
Financial_Derivative_Instrumen6
Financial Derivative Instruments - (Gain) Loss by Hedging Relationship (Details) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | ||
Cash Flow Hedging | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
(Gain) loss recognized in AOCI on derivatives (effective portion) | $755 | $38 | ||
(Gain) loss reclassified from AOCI into income (effective portion)(a) | 36 | [1] | 121 | [1] |
(Gain) loss recognized in income on derivatives (ineffective portion)(b) | 3 | [2] | 11 | [2] |
Fuel derivatives | Cash Flow Hedging | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
(Gain) loss recognized in AOCI on derivatives (effective portion) | 749 | [3] | 52 | [3] |
(Gain) loss reclassified from AOCI into income (effective portion)(a) | 22 | [1],[3] | 103 | [1],[3] |
(Gain) loss recognized in income on derivatives (ineffective portion)(b) | 7 | [2] | 10 | [2] |
Fuel derivatives | Not Designated as Hedging Instrument | Other Nonoperating Income Expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
(Gain) loss recognized in income on derivatives | 244 | -100 | ||
Interest rate derivatives | Cash Flow Hedging | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
(Gain) loss recognized in AOCI on derivatives (effective portion) | 6 | [3] | -14 | [3] |
(Gain) loss reclassified from AOCI into income (effective portion)(a) | 14 | [1],[3] | 18 | [1],[3] |
(Gain) loss recognized in income on derivatives (ineffective portion)(b) | ($4) | [2] | $1 | [2] |
[1] | Amounts related to fuel derivative contracts and interest rate derivatives are included in Fuel and oil and Interest expense, respectively. | |||
[2] | Amounts are included in Other (gains) losses, net. | |||
[3] | Net of tax |
Financial_Derivative_Instrumen7
Financial Derivative Instruments - Fair Values of Fuel Derivatives Amounts Posted as Collateral (Details) (USD $) | Dec. 31, 2014 | |
In Millions, unless otherwise specified | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Maximum Sum Of Derivatives Of Counterparty To Be Included In Other | $25 | |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ||
Cash Collateral Percent Of Fair Value Fuel Derivatives Contracts | 100.00% | |
Letter of Credit Percent of Collateral | 100.00% | |
Fuel derivatives | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Fair value of fuel derivatives | -1,001 | |
Aircraft collateral pledged to CP | -134 | |
Letters of credit (LC) | -250 | |
Counterparty A | Fuel derivatives | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Fair value of fuel derivatives | -333 | |
Cash collateral held by CP | -50 | |
Aircraft collateral pledged to CP | -134 | |
Letters of credit (LC) | -100 | |
Counterparty B | Fuel derivatives | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Fair value of fuel derivatives | -136 | |
Cash collateral held by CP | -98 | |
Aircraft collateral pledged to CP | 0 | |
Letters of credit (LC) | 0 | |
Counterparty C | Fuel derivatives | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Fair value of fuel derivatives | -122 | |
Cash collateral held by CP | -57 | |
Aircraft collateral pledged to CP | 0 | |
Letters of credit (LC) | 0 | |
Counterparty D | Fuel derivatives | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Fair value of fuel derivatives | -219 | |
Cash collateral held by CP | 0 | |
Aircraft collateral pledged to CP | 0 | |
Letters of credit (LC) | -150 | |
Counterparty E | Fuel derivatives | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Fair value of fuel derivatives | -66 | |
Cash collateral held by CP | -23 | |
Aircraft collateral pledged to CP | 0 | |
Letters of credit (LC) | 0 | |
Counterparty F | Fuel derivatives | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Fair value of fuel derivatives | -86 | |
Cash collateral held by CP | -38 | |
Aircraft collateral pledged to CP | 0 | |
Letters of credit (LC) | 0 | |
Counterparty Other | Fuel derivatives | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Fair value of fuel derivatives | -39 | [1] |
Cash collateral held by CP | 0 | [1] |
Aircraft collateral pledged to CP | 0 | [1] |
Letters of credit (LC) | 0 | [1] |
Minimum | Counterparty A | Fuel derivatives | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Option to substitute LC for cash Threshold 1 | -50 | [2] |
If credit rating is investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -50 | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 2 | -600 | |
Fair value of fuel derivative level at which cash is received from CP | 50 | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | -200 | [2] |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | 0 | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 2 | -600 | |
Fair value of fuel derivative level at which cash is received from CP | [3] | |
Fair value of fuel derivative levels at which aircraft collateral is pledged to CP | -200 | |
Minimum | Counterparty B | Fuel derivatives | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Option to substitute LC for aircraft | -100 | [2] |
Option to substitute LC for cash Threshold 1 | -500 | |
If credit rating is investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -50 | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 2 | -500 | |
Fair value of fuel derivative level at which cash is received from CP | 150 | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | -100 | [2] |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | 0 | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 2 | -500 | |
Fair value of fuel derivative level at which cash is received from CP | [3] | |
Fair value of fuel derivative levels at which aircraft collateral is pledged to CP | -100 | |
Minimum | Counterparty C | Fuel derivatives | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Option to substitute LC for cash Threshold 1 | -100 | [4] |
If credit rating is investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -75 | |
Fair value of fuel derivative level at which cash is received from CP | 175 | [5] |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | [3] | |
Fair value of fuel derivative level at which cash is received from CP | [3] | |
Minimum | Counterparty D | Fuel derivatives | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Option to substitute LC for aircraft | -150 | [2] |
Option to substitute LC for cash Threshold 1 | -75 | [2] |
Option to substitute LC for cash Threshold 2 | -550 | [2] |
If credit rating is investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -75 | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 2 | -550 | |
Fair value of fuel derivative level at which cash is received from CP | 200 | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | -150 | [2] |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | 0 | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 2 | -550 | |
Fair value of fuel derivative level at which cash is received from CP | [3] | |
Fair value of fuel derivative levels at which aircraft collateral is pledged to CP | -150 | |
Minimum | Counterparty E | Fuel derivatives | ||
If credit rating is investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -50 | |
Fair value of fuel derivative level at which cash is received from CP | 30 | |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | [3] | |
Fair value of fuel derivative level at which cash is received from CP | [3] | |
Minimum | Counterparty F | Fuel derivatives | ||
If credit rating is investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -50 | |
Fair value of fuel derivative level at which cash is received from CP | -50 | |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | [3] | |
Fair value of fuel derivative level at which cash is received from CP | [3] | |
Maximum | Counterparty A | Fuel derivatives | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Option to substitute LC for aircraft | -400 | [6] |
Option to substitute LC for cash Threshold 1 | -150 | [2] |
If credit rating is investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -200 | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | -600 | [2] |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -200 | |
Fair value of fuel derivative levels at which aircraft collateral is pledged to CP | -600 | |
Maximum | Counterparty B | Fuel derivatives | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Option to substitute LC for aircraft | -500 | [2] |
If credit rating is investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -100 | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | -500 | [2] |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -100 | |
Fair value of fuel derivative levels at which aircraft collateral is pledged to CP | -500 | |
Maximum | Counterparty C | Fuel derivatives | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Option to substitute LC for cash Threshold 1 | -150 | [4] |
Maximum | Counterparty D | Fuel derivatives | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Option to substitute LC for aircraft | -550 | [2] |
Option to substitute LC for cash Threshold 1 | -150 | [2] |
If credit rating is investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -150 | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | -550 | [2] |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ||
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -150 | |
Fair value of fuel derivative levels at which aircraft collateral is pledged to CP | -550 | |
Maximum | Counterparty F | Fuel derivatives | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Option to substitute LC for cash Threshold 1 | [7] | |
[1] | Individual counterparties with fair value of fuel derivatives <$25 million. | |
[2] | The Company has the option of providing cash, letters of credit, or pledging aircraft as collateral. | |
[3] | Cash collateral is provided at 100 percent of fair value of fuel derivative contracts. | |
[4] | The Company has the option of providing cash or letters of credit as collateral. | |
[5] | Thresholds may vary based on changes in credit ratings within investment grade. | |
[6] | The Company has the option of providing letters of credit in addition to aircraft collateral if the appraised value of the aircraft does not meet the collateral requirements. | |
[7] | The Company has the option to substitute letters of credit for 100 percent of cash collateral requirement. |
Fair_Value_Measurements_Narrat
Fair Value Measurements Narrative (Details) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Agreements | |
Fair Value Disclosures [Abstract] | |
Available-for-sale Securities, Fair Value Disclosure | $27 |
Debt agreements not publicly held | 6 |
Fair_Value_Measurements_Measur
Fair Value Measurements - Measured on Recurring Basis (Details) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | $0 | $0 | ||
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount | 0 | 0 | ||
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 0 | 0 | ||
Fair Value, Liabilities, Level 2 to Level 1 Transfers, Amount | 0 | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net | 0 | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Transfers, Net | 0 | 0 | ||
Fuel derivatives: | ||||
Derivative Asset, Fair Value, Gross Asset | 1,360 | [1] | 503 | [1] |
Fuel derivatives: | ||||
Derivative Liability, Fair Value, Gross Liability | -2,409 | [1] | -380 | [1] |
Fair Value, Measurements, Recurring | Period end date | ||||
Assets | ||||
Treasury bills | 1,450 | 1,570 | ||
Interest rate derivatives (see Note 10) | 13 | 20 | ||
Fuel derivatives: | ||||
Other available for sale securities | 68 | 63 | ||
Total assets | 4,443 | 3,757 | ||
Fuel derivatives: | ||||
Interest rate derivatives (see Note 10) | -61 | -77 | ||
Deferred Compensation | -168 | -158 | ||
Total Liabilities | -2,409 | -380 | ||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ||||
Assets | ||||
Treasury bills | 1,450 | 1,570 | ||
Interest rate derivatives (see Note 10) | 0 | 0 | ||
Fuel derivatives: | ||||
Other available for sale securities | 63 | 58 | ||
Total assets | 2,623 | 2,620 | ||
Fuel derivatives: | ||||
Interest rate derivatives (see Note 10) | 0 | 0 | ||
Deferred Compensation | -168 | -158 | ||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ||||
Assets | ||||
Treasury bills | 0 | 0 | ||
Interest rate derivatives (see Note 10) | 13 | 20 | ||
Fuel derivatives: | ||||
Other available for sale securities | 0 | 0 | ||
Total assets | 896 | 626 | ||
Fuel derivatives: | ||||
Interest rate derivatives (see Note 10) | -61 | -77 | ||
Deferred Compensation | 0 | 0 | ||
Total Liabilities | -426 | -85 | ||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ||||
Assets | ||||
Treasury bills | 0 | 0 | ||
Interest rate derivatives (see Note 10) | 0 | 0 | ||
Fuel derivatives: | ||||
Other available for sale securities | 5 | 5 | ||
Total assets | 924 | 511 | ||
Fuel derivatives: | ||||
Interest rate derivatives (see Note 10) | 0 | 0 | ||
Deferred Compensation | 0 | 0 | ||
Total Liabilities | -1,983 | -295 | ||
Cash Equivalents | Fair Value, Measurements, Recurring | Period end date | ||||
Assets | ||||
Cash equivalents | 1,110 | [2] | 992 | [2] |
Cash Equivalents | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ||||
Assets | ||||
Cash equivalents | 1,110 | [2] | 992 | [2] |
Cash Equivalents | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ||||
Assets | ||||
Cash equivalents | 0 | [2] | 0 | [2] |
Cash Equivalents | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ||||
Assets | ||||
Cash equivalents | 0 | [2] | 0 | [2] |
Commercial paper | Fair Value, Measurements, Recurring | Period end date | ||||
Assets | ||||
Cash equivalents | 70 | 280 | ||
Commercial paper | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ||||
Assets | ||||
Cash equivalents | 0 | 0 | ||
Commercial paper | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ||||
Assets | ||||
Cash equivalents | 70 | 280 | ||
Commercial paper | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ||||
Assets | ||||
Cash equivalents | 0 | 0 | ||
Certificates of deposit | Fair Value, Measurements, Recurring | Period end date | ||||
Assets | ||||
Cash equivalents | 4 | 23 | ||
Certificates of deposit | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ||||
Assets | ||||
Cash equivalents | 0 | 0 | ||
Certificates of deposit | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ||||
Assets | ||||
Cash equivalents | 4 | 23 | ||
Certificates of deposit | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ||||
Assets | ||||
Cash equivalents | 0 | 0 | ||
Eurodollar Time Deposits | Fair Value, Measurements, Recurring | Period end date | ||||
Assets | ||||
Cash equivalents | 98 | 60 | ||
Eurodollar Time Deposits | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ||||
Assets | ||||
Cash equivalents | 0 | 0 | ||
Eurodollar Time Deposits | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ||||
Assets | ||||
Cash equivalents | 98 | 60 | ||
Eurodollar Time Deposits | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ||||
Assets | ||||
Cash equivalents | 0 | 0 | ||
Certificates of deposit | Fair Value, Measurements, Recurring | Period end date | ||||
Assets | ||||
Investments | 256 | 227 | ||
Certificates of deposit | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ||||
Assets | ||||
Investments | 0 | 0 | ||
Certificates of deposit | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ||||
Assets | ||||
Investments | 256 | 227 | ||
Certificates of deposit | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ||||
Assets | ||||
Investments | 0 | 0 | ||
Auction rate securities | Fair Value, Measurements, Recurring | Period end date | ||||
Assets | ||||
Investments | 27 | [3] | 39 | [3] |
Auction rate securities | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ||||
Assets | ||||
Investments | 0 | [3] | 0 | [3] |
Auction rate securities | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ||||
Assets | ||||
Investments | 0 | [3] | 0 | [3] |
Auction rate securities | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ||||
Assets | ||||
Investments | 27 | [3] | 39 | [3] |
Swap | Fair Value, Measurements, Recurring | Period end date | ||||
Fuel derivatives: | ||||
Derivative Asset, Fair Value, Gross Asset | 455 | [4] | 16 | [5] |
Fuel derivatives: | ||||
Derivative Asset, Fair Value, Gross Liability | -365 | [4] | -8 | [5] |
Derivative Liability, Fair Value, Gross Liability | -21 | [4] | ||
Swap | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ||||
Fuel derivatives: | ||||
Derivative Asset, Fair Value, Gross Asset | 0 | [4] | 0 | [5] |
Fuel derivatives: | ||||
Derivative Asset, Fair Value, Gross Liability | 0 | [4] | 0 | [5] |
Derivative Liability, Fair Value, Gross Liability | 0 | [4] | ||
Swap | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ||||
Fuel derivatives: | ||||
Derivative Asset, Fair Value, Gross Asset | 455 | [4] | 16 | [5] |
Fuel derivatives: | ||||
Derivative Asset, Fair Value, Gross Liability | -365 | [4] | -8 | [5] |
Swap | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ||||
Fuel derivatives: | ||||
Derivative Asset, Fair Value, Gross Asset | 0 | [4] | 0 | [5] |
Fuel derivatives: | ||||
Derivative Asset, Fair Value, Gross Liability | 0 | [4] | 0 | [5] |
Derivative Liability, Fair Value, Gross Liability | -21 | [4] | ||
Options Held | Fair Value, Measurements, Recurring | Period end date | ||||
Fuel derivatives: | ||||
Derivative Asset, Fair Value, Gross Asset | 458 | [5] | ||
Derivative Liability, Fair Value, Gross Asset | 892 | [4] | 9 | [4] |
Fuel derivatives: | ||||
Derivative Asset, Fair Value, Gross Liability | -274 | [5] | ||
Derivative Liability, Fair Value, Gross Liability | -1,983 | [4] | ||
Options Held | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ||||
Fuel derivatives: | ||||
Derivative Asset, Fair Value, Gross Asset | 0 | [5] | ||
Derivative Liability, Fair Value, Gross Asset | 0 | [4] | 0 | [4] |
Fuel derivatives: | ||||
Derivative Asset, Fair Value, Gross Liability | 0 | [5] | ||
Derivative Liability, Fair Value, Gross Liability | 0 | [4] | ||
Options Held | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ||||
Fuel derivatives: | ||||
Derivative Asset, Fair Value, Gross Asset | 0 | [5] | ||
Derivative Liability, Fair Value, Gross Asset | 0 | [4] | 0 | [4] |
Fuel derivatives: | ||||
Derivative Asset, Fair Value, Gross Liability | 0 | [5] | ||
Derivative Liability, Fair Value, Gross Liability | 0 | [4] | ||
Options Held | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ||||
Fuel derivatives: | ||||
Derivative Asset, Fair Value, Gross Asset | 458 | [5] | ||
Derivative Liability, Fair Value, Gross Asset | 892 | [4] | 9 | [4] |
Fuel derivatives: | ||||
Derivative Asset, Fair Value, Gross Liability | -274 | [5] | ||
Derivative Liability, Fair Value, Gross Liability | ($1,983) | [4] | ||
[1] | Represents the position of each trade before consideration of offsetting positions with each counterparty and does not include the impact of cash collateral deposits provided to or received from counterparties. See discussion of credit risk and collateral following in this Note. | |||
[2] | Cash equivalents are primarily composed of money market investments. | |||
[3] | Noncurrent investments are included in Other assets in the Consolidated Balance Sheet. | |||
[4] | In the Consolidated Balance Sheet amounts are presented as a net liability. See Note 10. | |||
[5] | In the Consolidated Balance Sheet amounts are presented as a net asset. See Note 10. |
Fair_Value_Measurement_Fair_Va
Fair Value Measurement - Fair Value Assets and Liabilities Measured on Recurring Basis with Unobservable Inputs (Details) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | $216 | $260 | ||
Total gains or (losses) (realized or unrealized) | ||||
Included in earnings | -439 | 71 | ||
Included in other comprehensive income | -1,088 | -104 | ||
Purchases | 403 | 357 | ||
Sales | -170 | -417 | ||
Settlements | 19 | 49 | ||
Ending Balance | -1,059 | 216 | ||
The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2014 | -450 | 86 | ||
Fuel derivatives | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | 172 | 219 | ||
Total gains or (losses) (realized or unrealized) | ||||
Included in earnings | -439 | 71 | ||
Included in other comprehensive income | -1,091 | -107 | ||
Purchases | 403 | [1] | 357 | [1] |
Sales | -155 | [1] | -417 | [1] |
Settlements | 19 | 49 | ||
Ending Balance | -1,091 | 172 | ||
The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2014 | -450 | 86 | ||
Auction rate securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | 39 | [2] | 36 | |
Total gains or (losses) (realized or unrealized) | ||||
Included in earnings | 0 | 0 | ||
Included in other comprehensive income | 3 | 3 | ||
Purchases | 0 | 0 | ||
Sales | -15 | 0 | ||
Settlements | 0 | 0 | ||
Ending Balance | 27 | [2] | 39 | [2] |
The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2014 | 0 | 0 | ||
Other securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | 5 | 5 | ||
Total gains or (losses) (realized or unrealized) | ||||
Included in earnings | 0 | 0 | ||
Included in other comprehensive income | 0 | 0 | ||
Purchases | 0 | 0 | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Ending Balance | 5 | 5 | ||
The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2014 | $0 | $0 | ||
[1] | The purchase and sale of fuel derivatives are recorded gross based on the structure of the derivative instrument and whether a contract with multiple derivatives is purchased as a single instrument or separate instruments. | |||
[2] | Included in Other assets in the Consolidated Balance Sheet. |
Fair_Value_Measurements_Quanti
Fair Value Measurements - Quantitative Information about Level 3 Fair Value (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Discounted Cash Flow | Illiquidity Premium | Auction rate securities | |
Quantitative Information About Level 3 [Line Items] | |
Fair Value Measurement Range, Minimum | 3.00% |
Fair Value Measurement Range, Maximum | |
Discounted Cash Flow | Counterparty Credit Spread | Auction rate securities | |
Quantitative Information About Level 3 [Line Items] | |
Fair Value Measurement Range, Minimum | 1.00% |
Fair Value Measurement Range, Maximum | 2.00% |
Discounted Cash Flow | Time To Principal Recovery | Auction rate securities | |
Quantitative Information About Level 3 [Line Items] | |
Fair Value Measurement Range, Minimum, Term | 8 years |
Fair Value Measurement Range, Maximum, Term | |
2015 | Option Model | Implied Volatility | Fuel derivatives | |
Quantitative Information About Level 3 [Line Items] | |
Fair Value Measurement Range, Minimum | 23.00% |
Fair Value Measurement Range, Maximum | 47.00% |
2016 | Option Model | Implied Volatility | Fuel derivatives | |
Quantitative Information About Level 3 [Line Items] | |
Fair Value Measurement Range, Minimum | 24.00% |
Fair Value Measurement Range, Maximum | 36.00% |
2017 | Option Model | Implied Volatility | Fuel derivatives | |
Quantitative Information About Level 3 [Line Items] | |
Fair Value Measurement Range, Minimum | 19.00% |
Fair Value Measurement Range, Maximum | 30.00% |
2018 | Option Model | Implied Volatility | Fuel derivatives | |
Quantitative Information About Level 3 [Line Items] | |
Fair Value Measurement Range, Minimum | 25.00% |
Fair Value Measurement Range, Maximum | 27.00% |
Fair_Value_Instruments_Carryin
Fair Value Instruments - Carrying and Estimated Fair Value of Debt (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2006 | Dec. 31, 2012 | Feb. 28, 2005 | Apr. 29, 2009 | Jul. 01, 2009 | 6-May-08 | Feb. 28, 1997 | Oct. 31, 2009 |
In Millions, unless otherwise specified | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt and Capital Lease Obligations | $2,713 | $2,842 | ||||||||
5.75% Notes due 2016 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.75% | |||||||||
5.75% Notes due 2016 | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt and Capital Lease Obligations | 313 | 320 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.75% | |||||||||
5.25% Convertible Senior Notes due 2016 | Convertible Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.25% | 5.25% | 5.25% | |||||||
5.125% Notes due 2017 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.13% | |||||||||
5.125% Notes due 2017 | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt and Capital Lease Obligations | 316 | 322 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.13% | |||||||||
French Credit Agreements due 2018 - 1.06% | Notes Payable to Banks | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt and Capital Lease Obligations | 36 | 46 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 1.06% | |||||||||
2.75% Unsecured Senior Notes Due 2019 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 2.75% | |||||||||
2.75% Unsecured Senior Notes Due 2019 | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt and Capital Lease Obligations | 300 | 0 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 2.75% | |||||||||
Term Loan Agreement due 2019 - 6.315% | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.32% | |||||||||
Term Loan Agreement due 2019 - 6.315% | Notes Payable to Banks | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt and Capital Lease Obligations | 178 | 210 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.32% | |||||||||
Term Loan Agreement due 2019 - 6.84% | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.84% | |||||||||
Term Loan Agreement due 2019 - 6.84% | Notes Payable to Banks | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt and Capital Lease Obligations | 73 | 85 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.84% | |||||||||
Term Loan Agreement due 2020 - 5.223% | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.22% | |||||||||
Term Loan Agreement due 2020 - 5.223% | Notes Payable to Banks | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt and Capital Lease Obligations | 372 | 413 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.22% | |||||||||
Pass Through Certificates due 2022 - 6.24% | Enhanced Equipment Trust Certificate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt and Capital Lease Obligations | 355 | 371 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 6.24% | |||||||||
7.375% Debentures due 2027 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 7.38% | |||||||||
7.375% Debentures due 2027 | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt and Capital Lease Obligations | 134 | 136 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 7.38% | 7.38% | ||||||||
Level 2 | 5.75% Notes due 2016 | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notes Payable, Fair Value | 335 | |||||||||
Level 2 | 5.25% Convertible Senior Notes due 2016 | Convertible Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notes Payable, Fair Value | 318 | |||||||||
Level 2 | 5.125% Notes due 2017 | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notes Payable, Fair Value | 338 | |||||||||
Level 2 | 2.75% Unsecured Senior Notes Due 2019 | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notes Payable, Fair Value | 304 | |||||||||
Level 2 | Pass Through Certificates due 2022 - 6.24% | Enhanced Equipment Trust Certificate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notes Payable, Fair Value | 410 | |||||||||
Level 2 | 7.375% Debentures due 2027 | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loans Payable, Fair Value | 160 | |||||||||
Level 3 | French Credit Agreements due 2018 - 1.06% | Notes Payable to Banks | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notes Payable, Fair Value | 36 | |||||||||
Level 3 | Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02% | Notes Payable to Banks | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notes Payable, Fair Value | 25 | |||||||||
Level 3 | Term Loan Agreement due 2019 - 6.315% | Notes Payable to Banks | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loans Payable, Fair Value | 178 | |||||||||
Level 3 | Term Loan Agreement due 2019 - 6.84% | Notes Payable to Banks | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loans Payable, Fair Value | 79 | |||||||||
Level 3 | Term Loan Agreement due 2020 - 5.223% | Notes Payable to Banks | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loans Payable, Fair Value | 367 | |||||||||
Level 3 | Floating-rate 737 Aircraft Notes payable through 2020 | Notes Payable to Banks | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notes Payable, Fair Value | 293 | |||||||||
AirTran Airways | 5.25% Convertible Senior Notes due 2016 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.25% | |||||||||
AirTran Airways | 5.25% Convertible Senior Notes due 2016 | Convertible Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt and Capital Lease Obligations | 113 | 115 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 5.25% | |||||||||
AirTran Airways | Fixed-rate 717 Aircraft Notes payable through 2017 - 10.37% | Enhanced Equipment Trust Certificate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt and Capital Lease Obligations | 0 | 41 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 10.37% | |||||||||
AirTran Airways | Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02% | Notes Payable to Banks | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt and Capital Lease Obligations | 24 | 30 | ||||||||
Interest rate stated in the debt agreement (in hundredths) | 7.02% | |||||||||
AirTran Airways | Floating-rate 737 Aircraft Notes payable through 2020 | Notes Payable to Banks | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt and Capital Lease Obligations | $300 | $340 |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ||
Balance at end of period | ($738) | ($3) |
Fuel derivatives | ||
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ||
Balance at beginning of period | -20 | -103 |
Changes in fair value | -1,191 | -82 |
Reclassification to earnings | 34 | 165 |
Balance at end of period | -1,177 | -20 |
Interest rate derivatives | ||
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ||
Balance at beginning of period | -58 | -108 |
Changes in fair value | -10 | 22 |
Reclassification to earnings | 23 | 28 |
Balance at end of period | -45 | -58 |
Defined benefit plan items | ||
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ||
Balance at beginning of period | 65 | 26 |
Changes in fair value | -24 | 39 |
Reclassification to earnings | 0 | 0 |
Balance at end of period | 41 | 65 |
Other | ||
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ||
Balance at beginning of period | 8 | -8 |
Changes in fair value | 0 | 16 |
Reclassification to earnings | 0 | 0 |
Balance at end of period | 8 | 8 |
Deferred tax | ||
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ||
Balance at beginning of period | 2 | 74 |
Changes in fair value | 454 | 0 |
Reclassification to earnings | -21 | -72 |
Balance at end of period | 435 | 2 |
Accumulated other comprehensive income (loss) | ||
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ||
Balance at beginning of period | -3 | -119 |
Changes in fair value | -771 | -5 |
Reclassification to earnings | 36 | 121 |
Balance at end of period | ($738) | ($3) |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) - Reclassification out of Accumulated Other Comprehensive Income (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | |||
Fuel and oil | ($5,293) | ($5,763) | ($6,120) |
Less: Tax Expense | 680 | 455 | 264 |
Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | |||
Net of Tax | 36 | ||
Fuel derivatives | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | |||
Fuel and oil | 34 | ||
Less: Tax Expense | 12 | ||
Net of Tax | 22 | ||
Interest rate derivatives | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | |||
Interest Expense | 23 | ||
Less: Tax Expense | 9 | ||
Net of Tax | $14 |
Employee_Retirement_Plans_Deta
Employee Retirement Plans (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Defined contribution plans [Abstract] | ||||||
Company contributions to all defined contribution plans expensed | $644 | $497 | $370 | |||
Maximum age after retirement that employees may use accrued unused sick time to pay for medical and dental premiums | 65 years | |||||
Change in benefit obligation [Roll Forward] | ||||||
APBO at beginning of period | 138 | 148 | ||||
Service cost | 10 | 30 | 20 | |||
Interest cost | 7 | 4 | 4 | |||
Benefits paid | -4 | -3 | ||||
Actuarial gain | 21 | -41 | ||||
Settlements | -3 | 0 | ||||
APBO at end of period | 169 | 138 | 148 | |||
Effect of a one percentage point change in assumed health care cost trend rates [Abstract] | ||||||
Increase in total service and interest costs | 3 | |||||
Increase in the APBO | 24 | |||||
Decrease in total service and interest costs | -2 | |||||
Decrease in the APBO | -20 | |||||
Estimated future benefit payments time period [Abstract] | ||||||
2015 | 5 | |||||
2016 | 6 | |||||
2017 | 7 | |||||
2018 | 7 | |||||
2019 | 8 | |||||
Next five years thereafter | 55 | |||||
Reconciliation of funded status to accrued postretirement benefit cost recognized on the balance sheet [Abstract] | ||||||
Funded status | -169 | -138 | ||||
Unrecognized net actuarial gain | -53 | -80 | ||||
Unrecognized prior service cost | 12 | 15 | ||||
Accumulated other comprehensive income | 41 | 65 | ||||
Cost recognized on Consolidated Balance Sheet | -169 | -138 | ||||
Components of periodic postretirement benefit cost [Abstract] | ||||||
Service cost | 10 | 30 | 20 | |||
Interest cost | 7 | 4 | 4 | |||
Amortization of prior service cost | 3 | 3 | 0 | |||
Recognized actuarial gain | -4 | -4 | -5 | |||
Settlements | -1 | 0 | 0 | |||
Net periodic postretirement benefit cost | $15 | $33 | $19 | |||
Actuarial assumptions used to account for postretirement benefit plans [Abstract] | ||||||
Weighted-average discount rate (in hundredths) | 4.10% | 5.05% | 2.90% | |||
Assumed healthcare cost trend rates [Abstract] | ||||||
Assumed healthcare cost trend rate decline (in hundredths) | 5.00% | |||||
Assumed healthcare cost trend rate | 6.88% | [1] | 7.50% | [1] | 8.00% | [1] |
Year the health care cost trend reaches ultimate rate (year) | 2025 | |||||
[1] | The assumed healthcare cost trend rate is assumed to remain at 6.88% for 2015, then decline gradually to 5.00% by 2025 and remain level thereafter. |
Income_Taxes_Detail
Income Taxes (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
DEFERRED TAX LIABILITIES: | |||
Accelerated depreciation | $4,277 | $4,069 | |
Fuel derivative instruments | 0 | 36 | |
Other | 51 | 84 | |
Total deferred tax liabilities | 4,328 | 4,189 | |
DEFERRED TAX ASSETS: | |||
Fuel derivative instruments | 521 | 8 | |
Deferred gains from sale and leaseback of aircraft | 20 | 24 | |
Capital and operating leases | 125 | 163 | |
Deferred tax assets construction obligation | 209 | 168 | |
Accrued engine maintenance | 83 | 90 | |
Accrued employee benefits | 334 | 307 | |
State taxes | 65 | 74 | |
Business partner income | 90 | 457 | |
Net operating losses and credit carryforwards | 3 | 14 | |
Other | 96 | 118 | |
Total deferred tax assets | 1,546 | 1,423 | |
Net deferred tax liability | 2,782 | 2,766 | |
CURRENT: | |||
Federal | 203 | 355 | -45 |
State | 29 | 44 | 12 |
Total current | 232 | 399 | -33 |
DEFERRED: | |||
Federal | 421 | 62 | 287 |
State | 27 | -6 | 10 |
Total deferred | 448 | 56 | 297 |
Total | 680 | 455 | 264 |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | |||
Tax at statutory U.S. tax rates | 636 | 423 | 240 |
Nondeductible items | 9 | 10 | 10 |
State income taxes, net of federal benefit | 37 | 25 | 14 |
Other, net | -2 | -3 | 0 |
Unrecognized Tax Benefits | $5 |
Quarterly_Financial_Data_Detai
Quarterly Financial Data (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Quarterly Financial Data [Abstract] | ||||||||||||
Revenues | $4,628 | [1] | $4,800 | $5,011 | $4,166 | $4,428 | $4,545 | $4,643 | $4,084 | $18,605 | $17,699 | $17,088 |
Operating income | 621 | 614 | 775 | 215 | 386 | 390 | 433 | 70 | 2,225 | 1,278 | 623 | |
Income (loss) before income taxes | 302 | 525 | 746 | 244 | 334 | 419 | 363 | 94 | 1,816 | 1,209 | 685 | |
Net income (loss) | $190 | $329 | $465 | $152 | $212 | $259 | $224 | $59 | $1,136 | $754 | $421 | |
Basic (in dollars per share) | $0.28 | [1] | $0.48 | $0.67 | $0.22 | $0.30 | $0.37 | $0.31 | $0.08 | $1.65 | $1.06 | $0.56 |
Diluted (in dollars per share) | $0.28 | [1] | $0.48 | $0.67 | $0.22 | $0.30 | $0.37 | $0.31 | $0.08 | $1.64 | $1.05 | $0.56 |
[1] | Includes a change in estimate, recorded on a prospective basis, effective October 1, 2014, which increased Passenger revenues by approximately $55 million and increased both Basic and Diluted net income per share by $.04. See Note 1 for further detail. |
Airtran_Acquisition_and_Relate
Airtran Acquisition and Related Matters (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Business Combinations [Abstract] | |||
Acquisition and integration | $126 | $86 | $183 |